Shanghai Real Estate Industry's Development And Policy Orientation Research

The real estate industry in Shanghai has been gain a rapid development and expansion since comprehensively promoting of the housing system reform. However, the housing price in Shanghai also climbs up rapidly. In 2000, per square meter of Shanghai house is about $3,326 on average, but till 2009, the average price had risen to $16,000 per square meter, moreover, the high-end housing price even exceeded $100,000. The problem of difficult housing has been one of the most urgent problem need to be solved by the Shanghai government. But, many researches show that the real estate industry is a pillar industry which can stimulate the national economic growth, which lead the national government as well as so many local governments to regard it as a pillar industry. Today, in facing with such an expensive housing price, is it still right for Shanghai government to maintain the judgment of the dominant economic status of real estate industry, with the ignorant of the significance of housing as the necessities of the people's livelihood? In my opinion, the answer is no.This paper will examine the Shanghai real estate industry development reality with two prospective: industry linkage and people's livelihood. We will analyze with quantitative instrument Shanghai resident home affordability and the contribution degree of real estate industry related to the national economy, which can provide the choice foundation between the economic growth and people's livelihood for Shanghai government. By looking into the development experience on real estate industry in foreign and domestic typical city, we also hope to supply some useful suggestion for the government about the corresponsive policy should be taken.Through our study, there are two important viewpoints in this paper:(1) The real estate industry is not the pillar for Shanghai today.The influence coefficient of Shanghai real estate industry is 0.70, and its induction coefficient is 0.55, both less than 1, and ranks low in the all 42 industries, indicating that the real estate industry in Shanghai is the weak radiation, and weak constraints of the industry. In contrast with the traditional view that the real estate industry has a long industrial chain and a leading role on the national economy, the real estate industry has a low correlation with other industries and a weak role of driving the national economy. Therefore, the backbone of the real estate industry continues to emphasize the status is wrong.(2) The housing price in Shanghai has seriously deviated from the purchasing power of local residents.The housing price in Shanghai has exceeded the capacity of most urban residents. Assuming 90 square meters per household, in 2009, the Shanghai housing price reached 1.42 million per suit, while the capacity of the average purchasing power of local residents was 56 million per suit, the difference is huge. Meanwhile, families with different income have the different affordability of housing prices, between which the low-income families have the greatest pressure of purchasing housing. In 2009, the housing price is so high that the low-income families scarcely have any ability to buy with their annual disposable incomeless than 5% of the actual price. Thus, the livelihood of the Shanghai housing market is not optimistic.It is certainly not a healthy market where most people cannot afford the housing price. However, the sustained and healthy and stable development of the real estate industry will have a direct impact on the stable, healthy and coordinated of the city's economic development, the sustainable Shanghai's development, the vital interest of people. Therefore, the Shanghai government must have a fully understanding of the status and role of the real estate industry for Shanghai's economy and society, based on upholding the trend of market-oriented reforms and giving full play to the role of market allocation of resources, use financial, tax, legal and necessary administrative means, strengthen the government's macro regulation and guidance to maintain the sustainable, healthy and coordinated development of the real estate industry. This paper make policy recommendations to regulate the real estate, mainly in four aspects: first, the building housing security system and the second is the regulation of real estate investment demand, third is to improve the land supply policy, and fourth is to strengthen the market order regulation.