Research Of Real Estate Market To The Inhibition Of Economic Growth

Real estate is a pillar industry in China, whether it's healthy development is related with the smooth operation of the overall macroeconomic. In recent years, the real estate market continues to heat up, leading to the rising real estate prices. High prices have had some negative impact. The real estate market's high profits attract a large number of investors, which many of them leading manufacturing companies. A lot of money flows into the property market, resulting in a relative shortage of capital in other industries, limiting its development of space. And moreover, it is not conducive to the economic structure adjustment, thereby affecting the entire national economy.Firstly, this article analyzes the status and existent problems of real estate market. Secondly, the article studies the negative impact on economic growth because of the overheated real estate market, mainly from the perspective of a combination of qualitative and quantitative based on both consumption and investment. In the consumption section, we research on the suppression of consumption due to the rising real estate prices according to whether the urban households are divided by income level. The results show that residents'consumption is significantly inhibited using the related data from 1987 to 2008. On this basis, we found that the consumption of low-income families isn't suppressed, but the consumption of medium and high-income families are occurred different degrees of inhibition. In the investment section, this article analyzes the crowding-out effect of Manufacturing capital owning to the excessive investment in real estate based on both sector's investment and new fixed assets. Finally, paper describes the relationship between financial risk and real estate. Besides, the paper summarizes the warning on China's real estate market, by analyzing the case of financial crisis.