| Compared with the burst of the bubble economy in Japan in the 1990s, nowadays,China has a strikingly similar prelude. Based on the Granger Causality Test, whetherthe surface-based supports of China's real estate prices are stable are quantitativelyanalyzed. The result shows that: with regard to the whole country, there is a long-runbalanced causality between the main power sources which support continued growthin demand——disposable income of residents and the level of urbanization, however,the Granger Test results of the sub-regions (cities) confirms that not all cities have thesame performance: surface-based supports of the real estate price are quite fragile inthose cities, and the real estate price is mainly caused by the positive feedbackmechanism which based on investment expansion (expected return, speculation) , notthe effective demand; On the one hand, the increased housing price enhances the costof urbanization and the threshold for the peasants to be members of the public, furtherundermined the advance of urbanization; on the other hand, high price fuels thespeculation, which leads to the risk of the market. Comparing the 35 typical cities'real estate markets also based on Granger Causality Test , it is found that real estatemarket risk in Southeast coastal cities, such as Guangzhou,Shenzhen,Shanghai andHangzhou, is obviously higher than Midwest City like Chengdu and Kunming.Therefore, it is necessary for the Government to take effective control measures tocurb high housing prices in those cities, and to contain its spread to the second andthird tier cities, in order to ensure the healthy and steady development of Chinese realestate market. |
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