China's Real Estate Bubble Theory And Empirical Research

Since the housing system reform of 1998, the real estate industry has maintained a rapid growth, which has played a significant role in promoting China's economic development. However, since 2003, the real estate price began to rise rapidly, especially in some cities such as Being, Shanghai and Guangzhou. This has led to some controversy about whether China's real estate market has bubbles or not. Some people think that China's real estate market has a serious bubble, others deny the exsistence of the real estate bubble. They said that high prices do not mean asset bubbles. China's housing prices are driven by strong demand.This paper starts with the definition and characteristics of the real estate bubble. The paper analyzes the causes of the real estate bubble, summarizes the measurement methods and reviewes the history of the typical real estate bubbles. Based on the study above, this paper does a empirical study of China's real estate market and uses a variety of indicators to measure China's real estate bubble. Finally, this paper makes some policy recommendations in order to promote the healthy development of China's real estate market.