Measure The Bubble Of Chinese Real Estate Based On The Ramsey Model

In modern society, the real estate is the basic condition based on people s survival and it is also the characterization of social progress. Not only the real estate promote itself develop swiftly, but also drive other relative industries evolute, Thereby stimulate the whole national economy to grow. China put the real estate industry as a pillar industry of the national economy in2003. But in recent years, as the property market continues to heat up, especially in2009, the selling prices of all kinds of real estate jumped significantly. And a series of controling policies have not put the real estate s price down. Contrary to this situation, people have to suspect that the rapidly growing situation is the "Rational Prosperity" which is driven by the real needs or the "False Prosperity" which is driven by the speculative demands.Because of this, the bubble of real estate has become gradually the hotspot of discussion.By using the combining method of qualitative and quantitative, the article analyzes the real estate bubble of1998-2010from three aspects. Firstly, the article evaluate the current situation of China real eatate by using the method of Index evaluation from the aspects of real eatate price、 real eatate supply and real eatate demand, so as to judge whether China s real eatate exist the bubble. Secondly, the article use the Ramsey model and the method of3o to measure the bubble to show the bubble s severity quantitatively. Lastly, it analysis the reasons for the formation of the bubble from the aspects of cost-push, demand pull and the underlying causes, so as to draw up the target policies.The result shows that:whether in terms of the real estate price, the real supply side or the demand for the real estate, our country dose appear the bubble in the real estate during the year of1998-2010. Specifically, Chinese real estate has gone through three stages between1998to2010. The first stage is the period of1998-2001during which the real estate is undervalued; The second stage is the year of2002-.2003and2006which belongs to the bubble-free operation interval; The third stage is the period of2004-2010during which the real estate market began to appear the bubble, especially the second half of2004、2007and2009appeared the most serious bubble.The reason are as follows:In the cost aspects,the main driving force produced of the advancing the price of commercial housing sales is the land exchange price inflation rather than the construction cost and the financing cost; In demand aspects, excess liquidity from the banking system makes residents get a loan more easily, which enhances the ability of people to buy houses; the further more and the main reason is the spechlate attitude of people promote housing demand. Finally, some policy suggestions are proposed to regulate the real estate market basing on the cause analysis.