A Study On The Loan Risk In The Real Estate Industry Under The Background Of Inflation

The real estate industry is now an important pillar industry of China's national economy, and have a significant effect on the adjustment of national economic structure, the stimulation of domestic demand, economic growth and the improvement of Chinese citizens'living condition and so on. Against such a background of rapid development, the thirsty of the whole industry for financial fund is increasing in an unprecedented manner.On one hand, financial loan from commercial banks is an irreplaceable fund source for the real estate industry, in terms of both the development of new residence projects and mortgage. On the other hand, offering the loan service generates a large proportion of benefits for the commercial banks and now is a core product of them. In association with the increase of the scale and the amount of the loan, however, financial risk is more and more obvious, and now drawing increasing attention from both the supervision level and the banks themselves, and turning into a key threat for the healthy development of the real estate industry and the banking industry as well.Especially, as the currency inflation rate in China reaches the highest point in the recent decade, multiple measurements are nowadays implemented by the government to contain the inflation trend. Such governmental response, nevertheless, would more or less raise the possibility of financial risk in the real estate loan. Therefore, preventing the loan risk and enhancing the quality of financial loan to the real estate industry, and as a consequence ensuring the healthy development of China's banking industry, is fundamental and extremely urgent, not only for the industries of the real estate and the banking, but also for the whole finance system of China and the stable and sustainable development of Chinese economy. This paper starts with a review of the basic theories in inflation and financial loan for real estate industry, and a detailed review of literature available in CNKI, Chinainfo and CQVIP, and as well the industrial cases collected from Internet and the real practice of the author herself. In the analysis part, three types of loan risk are categorized according to the effect of inflation on them. The current situation, reasons and particular cases in each type are explained and illustrated. For the solution suggestions, two groups of measurements which could be adopted by the banks, namely general measurement and specific measurement, are discussed. The analysis and discussion in this paper can contribute to theoretical building and empirical analysis in the field of the loan risk in the real estate industry, and therefore is of theoretical and practical significance.