Research On The Real Estate Bubbles & Early Warning

Since the latter half of the 1980s, Japan's economy has experienced the emergence, expansion and bursting of bubble economy. During the subsequent period of the bursting of the bubble from the early 1990s, Japan experienced a plummet in asset prices, the accumulation of huge nonperforming assets and resulting difficulties faced by financial institutions, and a prolonged recession. We also have seen this type of speculation in the cities of Asia, during the recent Asian financial crisis. With present evidence of strong recent gains in house price that stretch across substantial portions of China, accompanied by strong housing construction and the promoting policy of china government, we debate -whether the real estate price bubbles have appeared. There are some different opinions concerning this problem-Real estate has a powerful produce solicitation coefficient and always needs a great amount of operation financing which makes it have a profound influence on the development of national economy. In-depth studying on weather there is bubbles phenomenon in real-estate, how to measure the bubbles and early warning of real estate bubbles is urgently needed, which will be helpful for the government to establish reasonable policies.On these conditions, this paper firstly analyzes the cause of the bubbles economy from the basic theory of the bubbles economy by the standardization research methods. Secondly, it analyzes the specific mechanism and the harm of the real estate bubbles. At the same time, it leads the conditions of Japanese and Chinese real estate bubbles in the initial stage of 1990s to a conclusion. On these bases, this paper develops measuring methods of the real estate bubbles and designs the early warning system of the real estate bubbles. And then, this paper proposes a series of the precaution measures. Finally, an instance, the real estate market ofHangzhou, is demonstrated with use of the early warning system of the real estate bubbles.I sincerely hope this paper can give us enough attention to real estate bubbles and have a certain reference to the formulation of our country's real-estate policy.