The Application And Research Of Finance Lease In The Real Estate Market In China

Finance leases have started since 1952, which is now the second largest financial market. Finance leases were introduced into China in 1981, nearly before 30 years, but it developed slowly. The financial leasing was used in the real estate industry in 2004, which started much later. On the basis of research results, this paper is aimed to study the application of Finance leases on the real estate industry. This paper analysis the real estate industry's existing problems, propose the necessity of financial leasing business, and analysis its feasibility. Then the paper summarized the current problems on finance lease in the real estate industry. Lastly, based on the experiences of the United States and Japan, the paper offered some suggestions to develop finance lease in the real estate industry.This article included five sections.SectionⅠ:Introduction. This section outlined the background, meaning and purpose, analysis the literature, and introduced the content and methods of this paper. The domestic literature was classified as the view of theory and researchers. The foreign literature was mainly analysized and explained. And comparing the domestic and foreign literature, we summarized the new development of the study.SectionⅡ:The economic explanations of finance lease. The concept of finance leases was defined based on the difference from the domestic and international legal definition, and proceedingly we defined the finance lease of the real estate. The characteristics of finance lease included four parts:business relations, separation of ownership and rights to use, financing and financial materials, rents. Finally, finance leases and hire purchase and bank credit were compared for analysis from the perspective of financing leasing.SectionⅢ:Financing lease in China's real estate industry the applicability of analysis. This part analysis finance leases from necessity, feasibility and status in turn. There are three problems on China's real estate:structural contradictions, over-reliance on financial institutions and quality problems. The effective way to solve the problems is finance leasing, which indicated the necessity for using real estate finance lease. The feasibility of finance leases in real estate market. We analyzed the interests and risks of relevant parts. Under effective risk management, the benefits outweigh the risks, and real estate finance lease is feasible. Firstly, the lessees are divided into two categories, one is single residents, using comparative analysis, analysis financial leasing's advantage comparing with mortgage loans, the other is leased enterprises, there are four advantages in four areas which are financing, financial structure, reduction of taxes and flexible payment. Secondly, we analyzed the benefits of three types of lessors, which ate independent class, department of banking and vendors. Finally, in risk analysis, the lessees'risks are selection risk and operational risk, the lessors'risk is credit risk, we derived feasibility of finance leases in real estate market comparing benefits and risks. After analysis the feasibility of finance leases in real estate market. There are many problems on financing leasing in real estate in four aspects of recognition, legitimacy, regulatory agencies and within the industry.Section IV:The reference of Chinese real estate lease financing from overseas financing lease experience. There are many problems on financing leasing in real estate in four aspects of recognition; we introduced the USA and Japan's experiences in development status, industry characteristics and regulatory model, in order to solve China's problems.Section V:The suggestions on development of financing leasing in real estate. We offered our suggestions in three aspects of legal regulation, policy and industry. Firstly, the issue suggested legal and regulatory law to determine the legality of leasing real estate financing and the harmonization of regulatory. Secondly, the policies of financial and tax preferential policies and risk guarantee are necessary. Lastly, in the industry aspects, the suggestions are about advocacy, financing mode selection and credit reporting system.