A Study Of The Real Estate Bubble

China, in recent years, none of the economic topics is hotter than the real estateproblem.Therefore, in current situation, research and prevention of real estate bubbleis significant. From2000, our country real estate industry is experiencing a new boom.In many cities housing price keep surging. In2004, the national average price rose19.08%. Especially in some large cities such as Beijing, Shanghai, Hangzhou andother places, housing price rose even more. The real estate added value to GDP isincreasing, and now it has reached15.9%.With the national housing price rising and the real estate speculation existing,whether China real estate exists bubble has become the focus of the economistsdiscussion. As early as2002, bubble was proposed, End of the year, Premier Zhu alsoexpressed concern about the real estate bubble.Subsequent years, according to quarterly report on economic statistics, we foundthere was an ever-growing trend in housing price, the argument on bubble also enteredthe intense.Whether a certain bubble exists, and will it burst, thus affecting people’s lives?How to define the real estate bubble? How to measure? How to prevent? With theabove problems, firstly, we reviewed the theory of economic bubble and the realestate bubble; secondly, we analyzed the causes of the real estate bubble and how tomeasure the bubble? Then, according to the measuring method, we made an empiricalanalysis on Nanjing real estate market, and found that there was a certain bubble, andhas been in the warning area. At last, we must take measures to control bubblespreading, in order to prevent the evolution of the bubble economy.