The Research On Safe Assets Attribute Of Real Estate

The real estate market has become an important part of the macro economy of various countries,which has a significant impact on the operation of the macro economy and the stability of the financial system.Real estate price and risk prevention have become a hot issue in academia and policy.At present,Chinese real estate is remarkable,such as soaring prices,more and more rising under macro-control,regional differentiation.The global property market has experienced extremely robust growth over the past two decades,and the tendency for emerging and advanced economies to diverge is clear.Traditional analyses of real estate focus on land supply,economic growth,monetary policy,interest rate and certain key demographic variables.However,these factors are difficult to provide a logical and consistent explanation for real estate anomalies under a unifi ed theoretical framework.This dissertation innovatively studiesthe safe asset attributes of real estate under the theoretical framework of safe assets.Thus,this study contributes to our understanding of the pricing and financial functions of real estate,and provides scientific decision-making ideas for the regulation of.the real estate market.This dissertation aims to analyze the potential existence of safe asset attribute in the real estate market.Specifically,chapter III combs the internal logic of the safety attribute of real estate in detail.This paper reviews the evolution of modern safe assets and finds that the forms of safe assets are different in different historical periods.At the same time,the stylize fact of safe assets shortage in the world and China has been discussed,which is an important premise and realistic background for the potential existence of safe assets attribute in the market for real estate.Finally,this chapter also shows that offices fulfilled all conditions to be regarded as safe assets.This means that real estate increases their value during worsening economic times,hedges risk assets,is very mortgageable and liquid,does not suffer from adverse selection.The above contents provide the and theoretical basis,research background,and empirical ideas for the following empirical research.Next,this dissertation focuses on empirical research about safe asset attribute of real estate.The full text is carried out in three parts step by step.Firstly,chapter IV verifies the existence of safe asset attribute of real estate by analyzing micro data of Chinese household.We demonstrate the negative relationship between the risk attitude and allocation proportion of real estate in total household assets.This finding indicates that Chinese household regards real estate as a safe stored value to avoid risks,which lays an important micro foundation for the existence of the safe assets attribute of real estate.Further,this chapter examines the effect of risk attitude on real estate allocation at different times,and then analyzes the dynamic characteristics of the time dimension of safe asset attributes for real estate.Chapter Ⅴ focus on Chinese real estate.A local equilibrium model of real estate including heterogeneous household is constructed,which effectively connects the safety demand of household with real estate market.In empirical,this chapter examinedthe relationship between the supply of safe assets and the price of real estate using monthly panel data of Housing Price Index of 70 Cities in China,based on thesubstitution effect of real estate on safe assets.The results shows that Chinese real estate market does have the attribute of safe assets.In order to further explore the internal reasons for the increasing differentiation of house price,this paper uses quantile regression to test the self-realization of the safe assets attribute in the real estate market.In addition,based on the dynamic perspective,this chapter examines clarifies the dynamic characteristics of the safe asset attributes of Chinese real estate market under different economic states and financial market pressures.Chapter Ⅵ pays more attention on global real estate market.This chapter further considers whether safe assets attribute for real estate market still exists when the economy can obtain international safe assets from international financial market.Using an international dataset on 40 countries and 236 cities for the period 2000-2018,this chapter examines the relationship between the supply of global safe assets and global real estate boom by two-way fixed effects model.The empirical results show that safety attribute of real estate still exists for open economies.In addition,this chapter further finds that the safe asset attribute of global real estate has decreased after financial crisis.In addition,emerging economies or countries with low level of financial development,their real estate market undertakes more functions of safe assets,compared with developed economies or countries with high level of financial development.Based on the above analysis,our study uncovers the safety attributes of real estate in understanding property pricing and financial functions.In the evolution of credit system from physical standard to credit standard,real estate still plays an important role in the modern safe asset system.Safety attribu te of real estate is the reason why Chinese household allocates a large amount of real estate.It is also an important factor to promote Chinese real estate boom and global real estate market prosperity.In addition,the safety attribute of real estate has dynamic characteristics,and the safety valued by investors is different under distinct periods or states.Generally speaking,the safe asset attribute of real estate is gradually weakening from the perspective of time dimension.The safety attribute of real estate is enlarged,when the economic growth slows down or the macro-economic growth is weak.Correspondingly,with the increase of financial market pressure,the safe asset attribute given by investors in the real estate market will gradually decrease.Finally,safe assets the attribute is also one of factors that aggravatethe regional differentiation for real estate market.It is the spiral mechanism of the safety attribute and safety expectation of the real estate market that intensifies the regional differentiation between Chinese real estate market and the global real estate market.