Study On The Real Estate Bubble And Its Prevention In China

Since the reform of housing system in our country,the housing demands suppressed for many years are been gradually released and China's urban housing walks into the era of commercial housing.China's realestate in dustry develops rapidly and gradually becomes an important pillar of our national economy with continuous growth of economy,acceleration of urbanization and increase of urban realestate investment.People's living conditions are been improved,the development of the real estate industry not only promotes economic growth,but also provides a strong support for solving the people's livelihood issues.However,in the rapid development of the real estate industry,market speculation phenomenon becomes more and more serious,a large amount of money is been invested to the real estate industry,the speculative demands for people to buy a house are strong,developers hoard land,the housing prices of first-tier cities and some second-tier cities rise too fast,and so on.The occurrence of these problems arouse the attention of the society,and the state promulgates policies for the real estate market,hoping to solve these problems to make the development of the real estate market healthy.Behind the rapid development of the real estate industry,the existence of China's real estate market bubble becomes the focus of public opinion.In fact,the consequences of the previous real estate bubble events in the world are very serious,for example,the real estate bubble in Florida led to the great depression of the global economy in 1930 s.Therefore,it is of great significance to study whether there are bubbles in China's real estate market and how to effectively prevent risk of the real estate bubble.Firstly,this paper reviewed the real estate bubble event in the United States,Japan and Ireland,which can give us some experience,and found the government,bank and real estate speculation played important roles in the housing bubble.Then,the author briefly introduced the meaning of bubble,the real estate bubble,the bubble economy and the economic bubble,and analyzed mechanism of formation and influence of the real estate bubble in detail,and thought the formation of the real estate bubble had some relations with real estate prices,financial support,the dependence of the government to wards "land finance" and the lack of choice for renting or purchasing a house.The author also analyzed negative effects of the real estate bubble,for example,the bubble can lead to the unbalance of social resource allocation,threat to financial security,influence the operation of macro economic system and affect social psychology and behavior of the masses.The author had analyzed the current situation of China's real estate market which was about commercial housing prices and real estate investment before measured China's real estate bubble.Overall,China's real estate prices are growing almost every year,compared with people's income level,housing prices are high.Real estate investment is rising every year,and it as a share of GDP is becoming more and more big.Since 2009,the realestate investment remained at more than10%of GDP,which had a great contribution to our country nationaleconomy development.For the measure of the real estate bubble,the author analyzed the real estate bubble with different index and adopted factor analysis to give the index weight in order to build composite index to measure the real estate bubble in China,and the final result indicates that there are real estate bubbles in China.Lastly,the author based on the analysis of the real estate bubble and put forward some measures to prevent the housing bubble from different perspectives.These measures are specific and detailed.Firstly,land and capital swarm into the real estate market disorderly,which should be controlled strictly.Secondly,product structure and market structure should be perfected.Thirdly,government behavior should be standardized and improved.