A Study On The Developing Locus Of Urban Real Estate And Its Increment Affecting Factors In China

In China, the real estate industry has been playing an increasingly important role in the following aspects like promoting domestic consumption, increasing domestic demand, stimulating investment and keeping sustainable economic development since the Southeast Asia financial crisis in 1998. It has become the country's polar industry. However, the industry has been functioning unstably since the market economy reform, even with lumping fluctuation from time to time, which indicates that the government has not made an accurate assessment on its development, and macroeconomic controlling policy does not work effectively, particularly in go-aheadism and guidance. Traditional real estate status appraisal approaches, either alarming system or foam measurement and assessment, all have some laggings in time because of their own limitations.For this reason, this paper tries to find out new approach to study the relationship between real estate and economic development, search for the appropriate increment in real estate that goes well with the national economy, and makes an evaluation on the development of the industry through the comparison between the real and ideal increment. Furthermore, aiming at the structural problems existed in the current real estate market, the paper not only analyze the increment affecting factors, but also carry out factor analysis in order to subdivide the increment and provide basement to eliminate structural contradiction of real estate market. Through this study, the following achievements could be concluded:1. Based on a thorough theoretical analysis to the general laws of real estate industry development, this paper simulates the relations between per-capital annual increment in real estate industry(S) and per-capital GDP(GP), combining with the transect data of 46 countries in different developing periods. From the result, it is found that per-capital increment in real estate industry varies with variation of growth of per-capital GDP along one cubic curve (S = 0.6811GP - 0.0341GP~2 + 0.0005GP~3) , the curve rises firstly, then declines and tends to go up with the growth of per-capital GDP. Therefore, judgments could be made according to the model that the domestic real estate industry is in hot status to some extent, but it is too early to judge it is foam in 2003 and 2004. At the same time, forecast could also be made that the per-capital annual increment in housing in 2006 and 2007 should be controlled around 0.9447m~2 and 1.014m~2. On the other hand, the conclusion reveals that the bright prospects and rising potentials of real estate industry according to the location of the national economy in the simulated figure, which shows that the real estate industry will keep a strong tendency to boom before per-capital GDP amounts to $14812.62. It reaches the peak when per-capital increment in housing amounts to 4.2319 m~2. The result of this study on different countries have not only made up for the shortage of the data from vertical study, but displayed the long-term developing tendency of real estate industry, which offers a new too1 to predict,control and plan the development of the industry.2. With Unit Root Test and Granger Causality Test method, a cause-and-effect analysis to the variables affecting real estate industry shows that the national GDP growth, per-capital disposable income of a city resident, the national industrial structure adjustment and direct investment from foreign companies are all the Granger causes for the feal estate increment However, urbanization, closely related to real estate development, is not the Granger cause, which may be resulted to the factors such as Chinese traditional household register system, the relevant policies and income of the floating population. On the other hand, real estate development is the Granger cause of GDP growth, urbanization and national industrial structure adjustment. As we know, the real estate is a basic element for living and working, but it has been ignored for a long time. That's why it has been developing so fast recently, which to some extent has resolved the contradictions among GDP growth, urbanization and national industrial structure adjustment. Theoretical and practical analysis proves that macro-control is really necessary for real estate development and economic macro-control policy is one of the important factors affecting break real estate industrial. These findings have portrayed the developing locus and characteristics of the real estate industry in China from different angles, which builds a solid foundation for analysis to its increment affecting factors and the making of the relevant macro-control policies.3. Based on analysis to the affecting variables of Chinese real estate industry development, this paper has also made a comprehensive analysis to the variables with factor analysis method and concludes that the combining factors affecting Chinese real estate industry growth are living-pulling factor and production-pulling factor, which account for 96.40% for the growth of the industry with a ratio of 6:4 between them. The proportion is not only the result of development of the industry at last 20 years, but also of some significance to monitor and eliminate structural surplus in the field.4. This paper proposes corresponding macro-control policies like controlling the overall amount of land supplying, city plan, financing monitoring and taxation anti-speculation on the basis of the industry's developing locus and its inner structural proportion. Namely, based on proper increment corresponding to national economic development, total land supply and city plan shall be controlled, capital financed shall be in line with real estate increment, at same time, real estate taxation policies shall also be adopted in order to choke back the speculation in real estate market and guarantee the prosperous of real estate market.