The Analysis Of Our Housing Market Regulation Problem

The Chinese real estate market has got a rapid development since the housing system made the implementation of market-oriented reforms completely in1998.It has not only significantly improved the living conditions of the residents, but also effectively promoted the development of our national economy, and also it has become a pillar industry of the national economy. Although it has improved the efficiency of resource allocation, the housing market can not make effective solution to the problem of housing fair distribution. Especially in recent years, with the housing price rising, the phenomenon of the imbalance between supply and demand in our housing market is becoming more and more obvious. On one hand, the scarcity of land resources constrains the total supply of housing, and its geographical features also give the real estate development enterprise monopolistic advantages. The enterprise can use the phased development relying on their monopoly position to effectively control the housing supply and its price in each phase, which furtherly reduces the current housing supply at the same time. On the other hand, due to the multi-level demand for housing, the investment and speculative demand is over amplified in a context of excess liquidity with narrow investment channels in our country. These two factors have made the housing price deviated gradually from the housing affordability of the ordinary residents. At present, it’s very difficult for these people to satisfy their most basic housing needs through the market.But we have not established a perfect housing security system along with the market-oriented reforms of housing system. The lagging development of housing security makes its coverage still low at this stage, many people still need to meet their basic needs for housing through the housing market. Therefore, a large number of mid and low income stratums are excluded both by the housing security system and the housing market. If we can not properly solve the housing problems of these people, it will be a serious threat to our social stability in the future. So considering the government’s financial affordability is limited, strengthen the regulation of the housing market has become a reasonable and effective way.At present, the regulatory measures using in our housing market have covered both the supply and the demand sides, and also the government has increased the supply of the affordable housing for the vulnerable groups who are excluded from the housing market. This paper will use the theories of industrial organization and the economics of regulation to analyze the main measures taken by our government in the housing market regulation.This study concluded that the current housing market regulation in our country has made some effect, but also paid a higher cost for the regulation.In order to avoid the failure of government regulation policy, the government also needs to carry out more institutional innovation rather than rely on temporary solutions. In the long run, to protect the people’s livelihood and promote the healthy development of the real estate industry, the central government may have to rethink the status of the real estate industry in our national economy.