Analysis Of Real Estate Market Paradoxical Phenomena In China That Based On Non-Price Competition

With the rapid development of the real estate industry, a series of concerned problems emerge into the real estate market in china. The phenomena of "the coexistence of high profit and low concentration" and "coexistence of high housing price and high empty house rate" appear in real estate market. These are essentially two groups of phenomena which are contrary to the theory of SCP and the law of supply and demand.In this paper, we focus on these two groups of phenomena. According to the particularity of the real estate and the real estate market, we structure the analysis assumptions which are constructed from the general market. And find out the causes of the phenomena through the analysis of the models. We think the greatest feature of real estate is its non-mobile, and the greatest feature of real estate market its space competition. These features make the real estate market has the different analysis assumptions from the general market. Under the market structure of regional monopoly, the main form of competition in China's real estate industry is non-price competition; moreover the collusion strategy is the dominant strategy adopted by China's real estate enterprises. The non-price competition behavior of China's real estate industry will result in the increasing market concentration degree of the real estate industry and the increasing of the market monopoly degree. The local government is the endogenous participant of the market competition. Its behaviors don't change the result of models. The collusion strategy remains the dominant strategy. On other hand, because the developer can make Cross-period choice, if they have high expectation for market, the output of current supply will be changed. And space competition of the real estate market makes concentration index has little sense, and low concentration of market is not meaning that the market is competitive.