Shanghai Price Earnings Ratio

In recent years,the prices of real estate price in many cities in China soar, followed by lots of discussion about whether the price is too high and whether there are bubbles in real estate market.Hosing price-income ratio is an important index to synthetically decide whether the real estate market has bubbles and to analyze the residents' purchasing power.Research methods and conclusions on this topic vary a lot in the past,for different researchers use difference kinds of definition when calculating the housing price-income ratio.This paper summarizes the current research firstly.And according to international experiences and the result of housing purchase model,6-9 as the rational range of China's housing price-income ration is established.By comparing Shanghai with Chinese typical provinces as well as cities such as Beijing,the author comes to the result that there is nothing exceptional of the housing price-income ratio in Shanghai.After comparative study,this paper uses the absolute value research method. According to the international definition and the situation of China,this paper modifies the calculation of Shanghai's housing price-income ration.The result shows that the real housing price-income ratio in Shanghai doesn't exceed the rational range.Through comparative study and absolute value study,this paper comes to the conclusion that Shanghai's real estate market is rational as a whole.But through structural analysis,which means studying on the changes of housing price-income among different income groups,this paper concludes that the situation of low-income group is getting worse,the growth of whose income greatly falls behind the increase of house price.In the end,this paper gives some suggestions mainly on two aspects.One is that the government should pay attention to the increasing trend of housing price-income ration and give enough assistance to the low-income people.The second is that the government should take measures to shorten the income gap between low-income and high-income groups.