Study On Herding Behavior Of Real Estate Investment

The stability of the real estate market has important practical significance to the economic development.In recent years,house prices have gone up,and the public's enthusiasm for real estate investment has not been reduced.Real estate as a kind of investment goods in certain expectations easily be hype.Real estate is associated with banks,trusts and other financial institutions,the herd behavior of investors will expand financial risk,and may even lead to crisis.The theoretical framework of traditional finance is based on the efficient market hypothesis,but the theoretical result is not in accordance with the objective reality.Behavioral finance theory can explain the behavior of real estate market from the perspective of people's real psychology and behavior.This paper combines herding behavior theory with real estate investment to provide a new perspective to study the behavior of real estate investment and evade financial risk.This paper first introduces the theory of herding behavior and real estate investment theory.Then,using behavioral finance theory to explain the causes of the herd behavior of investors in the real estate market.Next,it shows that the herding behavior in the real estate market has the role of expanding financial risk.Finally,some suggestions are made for the causes of herd behavior in order to weaken the herd behavior and reduce the financial risk.The main recommendations include: first,housing return to residential property,rational investment;second,government provides the information platform guidance anticipated;third,financial institutions strengthen supervision and contraction of capital and credit.