The Relationship Between High Housing Price And Bank Credit

Real estate market and financial market are two important markets, especially development of real estate market. Real estate places a significant place in the entire national economy.It is an integral part of the social reproduction and known as "barometer" of the economy, The real estate industry is a high-risk industry, which highly relies on the credit aid from money market. In recent years, the credits on real estate increase too greatly, real estate price also rises.The real estate market of our country has developed increasingly and housing price rises fast. As the expectation to price rising is strengthening increasingly, not only the real estate company but also the people borrow money from the bank. For pursuing the profits the bank provide a large loan, so the loan for real estate occupied a large scale. However, a phenomenon which is worth noting is that the bank loan is the most resource of funds of supply and demand sides. As house prices rises too fast and profits of real estate investment are considerable, banks putting into real estate loan are generous. Real estate developing loans have become the main source of real estate investment. The housing mortgage loans are looked as low-risk and high-quality assets by various of commercial banks, so they become one of the main businesses which every bank develops vigorously. It makes portions of real estate developing loans and mortgage loans bigger increasingly. Because the national GDP developing quickly, the reform of housing system and urbanization promoting, the real estate market also presents a vigorous development future. It plays an important role in national GDP. The development of real estate industry needs the support of bank credit, so quick development in bank credit becomes general trend of events. However, because financial funds come into the real estate market excessively, the housing price rises too fast, which exists potential financial risk. For this reason, government issued measures against the increasing in real estate market too quickly. Down-payment for mortgage loan has been increased to 30%. So government makes the risk under control, to ensure the bank business function smoothly. However, how to define and judge the real estate bubble and what the theory it happened are still a controversy.First, this article uses the way of regression method to analyze relevance between the real estate industry and commercial bank real estate credit market though historic data. Second, this article uses several indicators measuring the reasonableness of housing price in China and draws conclusions:Recently the real estate market in China doesn't exist serious bubble totally, but the trend of bubble appearing is obvious. Every relative indicator is moving in high position, so the real estate market exists high potential risks but not appears serious bubble even bubble breaking. However, the relevant government departments on the bubble can not relax vigilance. They should pay close attention to the real estate market trends and take measures sizing up the current situation. Finally, on the basis of the above analysis, it makes some suggestions on avoiding the real estate price fluctuating violently and promoting the healthy, stable, continuous development of real estate market in China.