A Study On China's Policy-based Housing Finance

From the perspective of welfare economics, measuring the housing problem by Pareto Efficiency, it can be find that even if the protection of public resources is sufficient, the housing market supply is adequate, there is no guarantee of housing be enjoyed equally by all city residents, and it does not mean that the basic housing needs of urban residents can be met, therefore, there is possibility of a Pareto-improvement in the housing market. In addition, the income growth level of low-income groups has generally been below the average revenue growth in the basic pattern of market-oriented economic system, Therefore, the relative paying ability of the low-income is gradually weakening, and if housing price's growth is higher than the level of revenue growth, middle-income groups affordability of housing will gradually diminish, or even some high-income families will be forced out from the group who can afford house purchasing. In contrast with this situation is that China's residential housing financing channels is limited, the amount of housing mortgage loan provided by commercial bank is very small. Commercial bank set up strict limitation to house mortgage loan application for their own profit consideration. Rely solely on commercial bank mortgage loan is far from solution of the current low-income residents'housing problem. Therefore, from a welfare of efficiency and equity perspective, China's current commercial housing financing business status of inefficient, the involvement of policy-based housing finance could be better to resolve the problem of China's residents, especially, low-income group's deficient paying ability.In this paper, beginning with the general principle of policy-based housing finance, using the combinations of theory and practice, qualitative and quantitative, horizontal and vertical, foreign and domestic, the operation and development of policy-based housing finance is studied systematically. Basing on the study of the basic structure, content, characteristics and economic functions of policy-based housing finance, analyzing the housing welfare economic characteristic from the housing externalities, characteristics of quasi-public goods and the monopoly of housing market, I design a two-period iteration model to analyze the influence of policy-based house finance to different income groups' welfare. At the same time, analyze the effectiveness of China's policy-based housing finance from three aspects: fund raising, use and management. The main body of China's policy-based housing finance is housing fund. The running of housing fund make some measures of success, while there is also the lack of efficiency. On the bases of analyzing the national policy-based housing finance institutions and financing models, summarizing and evaluating national policy-based housing finance, China's developing suggestions of policy housing finance is given.In the short term, there exist large limitations of solving the housing problem entirely by housing finance market in China. First, financial markets are underdeveloped, and second, the means of financing housing finance are inadequate, the third is the lack of specialized housing finance system, and the fourth is the lack of appropriate risk-avoidance system design, the fifth is the legislative oversight mechanism is not perfect, and so on. To solve all the above problems in the short term is impossible, therefore, in the short and medium term phase of China's policy-based housing finance, the major is to amend the existing housing fund system, improve the efficiency and equity of the system. In the long term, China's policy-based housing finance will eventually adopt the open mode of operation, and will develop with commercial housing finance in harmony.