Economic Research And Relevant Policies Of China’s Real Estate Market

The China’s real estate industry has developed rapidly in recent years. Investment andsales in the market increases sharply, promoting the economic prosperity of our country,which makes the real estate industry one of the pillar industries of national economy.However, the rapidness of development dose not represent the development rational andeffective. The imbalance between supply and demand, as well as high-price transaction is themajor problems of our real estate industry. The Chinese government consistently strengthenits administrative control over the real estate recently, continuing to adopt various policies topromote the rational fallback of real estate prices.18th CPC National Congress reiterated theregulation of real estate is that the regulation is the direction of social stability and the controlcan not be loosened.This paper draws a summary of bubbles in real estate market and relative theories. Basedon this summary, operates empirical analysis on the bubbles within demand factor model andRamsey model. The result indicates that there are bubbles in our country’s real estate market.There are two reasons from supply and demand for real estate bubble. The scarcity ofland resources, excessive financial support, combined with the underdeveloped rental market,the strong speculative atmosphere, contribute to the high housing prices, breeding the realestate bubble, which should be suppressed because of its harm. As a result of false prosperityof fictitious economy, financial risks have been enlarged. The extortionate prices also causerampant speculation, the development of the real economy kept within limits resulting in theunbalance of the economic structure, except for moral decline, all of which are not conduciveto the construction of Harmonious Society.Draw on the experience of the United States, Japan, Singapore and other countries, thispaper puts forward the countermeasures and suggestions to control the real estate bubble inChina: increasing the effective supply of land, expanding financing channels, to reducefinancial risk. The government’s should also stable regulatory policy to guide public expectations and the reasonable flow of funds to the development of industry. Thegovernment should establish the more perfect housing security system to guarantee thehousing problems of low-income groups.