Chinese Real Estate Bubble Study

Usually arises in a real estate bubble in the country's economic boom, the performance of a bubble in property prices soars. However, the state reaches its peak after a sharp decline in market demand, thus bursting of the bubble in house prices. Evolution of the real estate bubble may bubble the economy, once the bubble burst, the economy of a country or region will bring serious consequences. China's real estate industry has maintained rapid growth in recent years, real estate prices rose annually. China's real estate bubbles have attracted widespread attention on this issue. Deep study of the formation mechanism of the real estate bubble and the preventive measures to safeguard the healthy development of the national economy is of great practical significance.This paper made a brief introduction to the research of domestic and international scholars on real estate bubble theory first; then on the basis of expounding bubble theory, found out the reason of real estate bubble by analyzing domestic and international cases, summarized its forms, and enumerated its harms; by reviewing real estate bubble appeared in history and status quo of Chinese real estate market, the author reached to a conclusion that China's real estate market have a bubble of hidden danger, and then made a economic explanation of its producing and bursting by using speculation and expectation theories. In this paper, pre-warning and prevention on the real estate bubble is essential: first, a brief introduction on some pre-warning indexes; then by giving different weights to various pre-warning indicators according to the specific circumstances of individual cities, the author expresses his views on the design of pre-warning systems. In the end, from perspectives of macro, micro and industrial policy on the problems that exist in China's real estate industry development, this paper put forwards many suggestions on the precautions against the real estate bubble in monetary, fiscal and industrial policy.