Chinese Public Real Estate Investment Research

With the continuous process of urbanization and the deepening process of urban housing system reform, the market mechanism has played a fundamental role of resource allocation in real estate.But at the same time, the rapid increase in house prices is making more and more people lose their ability to pay for housing, and it is difficult for the low-income families to solve their basic housing problem on their own. Protecting a citizen's right of residence is the duty of the government, and the real estate market failure highlights the need for government intervention in the real estate industry. In order to sovel the housing problem of the low-income groups, the government's public investment in real estate industry is becoming more important.Linking the national conditions in China, the research of public investment in real estate industy focuses on the following four issues:the first is the boundary of public investment in the real estate industry of China; the second is the model selection of public investment in the real estate industry of China; the third is the financing of public investment in the real estate industry of China; and the fourth is the impact of public investment on private investment in the real estate industry of China. The research of the first three issues used a similar method, that is, qualitative analysis is mainly used and quantitative analysis is supplemented. While the research method of the fouth issue is mainly used quantitative analysis and supplemented by qualitative analysis, which used the panel data of public investment and private investment in real estate industry from 1996 to 2008 at provincial level in China. The empirical analysis discussed the impact of public investment on private investment from general aspect and regional aspect respectively.The main points of this thesis are as follows:In the issue of public investment boundary, the primary prombems in China include that the unclear position of government, the lack of long-term goals and legal protection, the different purposes of the central government and local governments on the housing guarantee coverage, a large number of low-income outside the housing guarantee coverage because of household registration barriers, etc.In the issue of public investment mode and financing, the primary prombems in China include that there is no stable financing sources for public investment, the public investment is insufficient in land development phase, depending supply-side subsidies caused excessive interference to the market, and so on.Through the modeling of China's historical data, the result of estimating drew the conclusions that public investment crowd out private investment in real estate development, and spontaneous private investment varies among different regions.On the basis of systematical review from relevant international experience, combined with actual situation in China, this thesis put forward suggestions to solve the problems of public investment in real estate industry. Firstly, determining a reasonable boundary of public investment and establishing a dynamic adjustment mechanism of public investment boundary and other measures will be helpful to resolve boundary issues. Secondly, building a stable source of funds, choosing the appropriate public investment stage, using flexible forms of public investment and other measures will be beneficial to sovel the public investment models and financing problems. Thirdly, decrease the disadvantageous impact of public investment on private investment by reducing the crowding-out effect on private investment, formating public and private partnerships, etc.The main innovations of this thesis are as follows:Generally speaking, innovation of this paper is that the systemtic study on all respects has conducted in the public investment of the real estate industry.Specifically, the main innovations of this thesis include the following aspects.First of all, it's the first time to study and analyze the boundary of public investment in real estate industry from the dynamic point of view. The thesis set up the standards of public investment boundary and the factors of determining or changing the boundary, and summarized the domestic and foreign relevant experience systematically. The next, the thesis put real estate investment stages into the consideration of public investment mode selection firstly. Previous studies only defined the real estate investment model as supply-side subsidies and demand-side subsidies, and it is pioneering to take the time dimension into the research of public investment mode, so that the analysis became more comprehensive.Lastly, econometric model is used to analysis the impact of public investment on private investment empirically. In this thesis, the innovative quantitative analysis is based on the historical data in real estate industry of China.The shortages of this thesis:On the one hand, quite a few of public investment are implicit subsidies in real estate industry, such as derating the land transfer payment and related tax relief. But the thesis did not study implicit subsidies in depth because for the difficulty of data acquisition, and also did not discuss the measure methods of implicit subsidies.On the other hand, housing guarantee is the important use of public investment in real estate industry. Although the thesis studied the housing guarantee of urban residents deeply, it did not put the housing guarantee of non-urban residents into the discussion because of the time and energy constraints.