The Effect Of Real Estate Price Fluctuations On Financial Stability

As a capital-intensive industry,real estate development requires financial institutions' credit funds from the exploitation to the sales,so there is a very close relationship between real estate and the financial sector.If real estate prices rise excessively and beyond the actual value,when price bubble burst,the real estate risk will follow,these risk factors will lead to the financial industry turmoil,even exploding severe financial crisis.1980's Japan financial crisis,the Asian financial crisis in the nineties and in 2007 the US subprime mortgage crisis,they are due to financial instability triggered by the real estate price fluctuations.Since the real estate market reform,China's real estate prices have experienced a substantial rise,price bubble continues to accumulate.Therefore,academia gives high attention to the real estate market fluctuations and financial risk.Only fully understanding China's real estate prices and financial stability,in order to achieve sustainable development of real estate and financial sector.To promote the smooth transformation of economic development mode.Based on this background,this paper studies the relationship between China's real estate price fluctuations and financial stability.Firstly,this paper analyzes the connotation of real estate price fluctuations,basic theory of characteristics and influencing factors,the meaning and influencing factors of financial stability.To investigate the mechanism of real estate price fluctuations on financial stability from the direct and indirect effects of both.Secondly,having research on Status of China's real estate price fluctuations and financial stability.First,using time division method and the index of real estate sales price growth,research status of real estate price fluctuation.The results show that since 1993,China's real estate prices overall have been the trend of rising,and in parallel of trend volatility and cycle fluctuations.Second,Construction of the system comprising the reaction of macroeconomic,banking system,insurance system,financial system stability of macroeconomic indicators of system operation.Stable situation on the domestic financial market has been quantified in this context.The results show that in 2000-2014 China's financial stability increased and then decreased.Thirdly,using VAR model and GARCH model,inspecting the effects of real estate price fluctuations on financial stability.Research indicates that the growth rate of real estate prices and fluctuations in the growth rate of real estate prices both have impact on financial stability.The real estate market risk can spread to the internal financial system,the changes also affect the financial stability of the volatility of real estate prices.Finally,get the conclusions,and against excessive volatility of real estate prices to make some specific recommendations.Adopting moderate policies make a smooth landing,Strengthen the mortgage audit to control the occurrence of speculation,Improving the real estate financial market,Expanding financing channels for real estate,etc.