Research On Real Estate Bubbles And Its Financial Risks

In recent years, with the continuous progress of the housing system reform, the rapid growth of economic and the accelerated process of urbanization, China's real estate industry developed rapidly. It has gradually become new growing point of economic and hot spot of consumption. Many areas appeared some phenomenon such as high growth rate of investment in real estate, commercial housing vacancy rate increases, house prices rise, and so on. Lots of speculators were born, substantive hot money flowed in, speculative atmosphere increased strongly in the real estate market. In view of this situation,"is there bubbles in real estate market"became the bone of contention. At the same time, as a capital-intensive industry, the real estate industry had affinity with the financial industry. For the demand of substantive and long-using capital, the real estate industry depended on financial industry deeply. The financial sector's contribution rate to the real estate development reached 80% in many developed countries (including direct and indirect financing). But real estate is a high-risk industry, while supporting the rapid development of real estate industry, the financial sector will inevitably bear the high risk of the real estate industry. In our country, because the financing channels were singleness, the commercial banks became the main providers of the real estate financial risks. It signed that China's commercial banks had fatal hidden risk.Therefore, it has strong practical significance that to test if the real estate market has existed bubbles and to discuss how to guard against financial crisis triggered by the real estate financial risks. This paper started from the bubble concept, explore the nature of the bubble, and analyze the reasons of the real estate bubbles forming. A econometric model was built in this paper to find the price bubbles in real estate market. It educed that real estate bubbles had emerged around the country, some cities'bubble level is higher than the national average, such as Shanghai and Chongqing, and they began trending to break up.Based on the study above, A imperfect information dynamic game model and Mark Carey (1990)'s land model were used to make an analysis on the symbiotic and mutually reinforcing relationship between real estate market and financial system. On this basis, a further analysis about the mechanisms and causes of real estate bubbles triggered financial crisis was made. Finally, according to the analysis, referring to...