An Empirical Research Of Efficiency And Bubbles In Beijing Real Estate Market

Real estate industry belongs to the basic and superior industry and now it is a dominant position. Due to its advantage of strong relevance with other industries it has been the main industry. The housing price is one of the concerns of the multitude, whether or not the price go beyond the people's ability of payment, how is the fluctuating trend of housing price, these are the items should be paid attention to. The rise of housing price and the rise of vacancy rate increase the latent hazard, this should be paid attention to. Based on these considerations above, this paper tests the weak efficiency of Beijing real estate market and tests the bubbles in Beijing office market.The research of modern economics usually defines the bubble as the continuous deviation of the capital price from its basic value. Bubble economy begins with the prosperity and end with the crisis. The result of it leads to the distortion of the capital price, to the display of resources allocation and thus does harms to the healthy development of the financial system and the whole economy. An efficient housing market is of critical importance for individual welfare and for a well-functioning economy. At first this paper review the theories of market efficiency and bubbles, then introduce the definition of efficiency and bubbles and some test measures on emphasis. Also this paper introduce some usual index of real estate bubbles. In the second chapter , this paper summarize the domestic and foreign literatures about real estate market efficiency and bubbles.In the third chapter, this paper analysis the status of Beijing real estate market in recent years, emphasize particularly on the price trend and the ratio of housing price to income. The author compare the increase extent between price and GDP to identify whether the bubble exist in the estate market. As the key point, the fourth chapter separately use unit root test and serial correlation test inspect the weak efficiency of Beijing real estate market to search after the orderliness of the housing price of Beijing in past years, then the author find Beijing real estate market reach weak efficiency as a whole. Afterwards this paper use unit root & cointegration test and specification test inspect bubbles in Beijing office market. As a result we find there is bubbles in Beijing office market.