A Study Of The Real Estate Industry Development And Relative Problem In China

As the time advanced into the 21^st Century, Chinese real estate embraced its booming age. The overall scale of the real estate market keeps growing, but it is not well balanced between different districts. In the current situation that the government reduces the supply of land, the real estate price climbs again and again. In some areas, the price is going up too fast. The growth of the real estate price partially results from the increase of land prices and costs of improvement of construction material. Another cause is the increase of demand from the reform of the housing policy. Also, prices are being forced up from investment and speculation, inspired by the negative actual interest rate. Within the elements that affect the real estate price, the money supply M2 and per capita disposable income in urban residents have been quantified. With respect to the fast growth in real estate price, there are two distinct viewpoints. One says that it is "healthy" and the other one claims to be "bubble". The big difference between these two viewpoints comes from the varying methods and indexes applied to analysis. To be objective, I would say for the most part the real estate market is healthy, but there are still some bubbles in it. To deal with the overheating in some regional real estate markets, the government should implement a macro-policy to adjust the relationship between the demand and supply. The government should adopt different macro-policies for distinct districts, depending on the level of the regional development. Even though with the rise of interest rate of US Dollars, the Chinese interest rate will rise eventually. Under the stimulation of the strong demand in residential housing, the real estate price will follow an increasing path, but the rate will slow down. As the government regularizes the industry of real estate for its healthy development, it should pay attention to some problems in the field of real estate financing, and try to adopt an operational way to expand the financing sources for the real estate industry.