Exploration Of Xiamen's Real Estate Market With The Theory Of Real Estate Bubble

The rapid development of the real estate industry in recent years brings out a fierce argument on the existence of the real estate bubble in our country. Many cases in history tell us that bursting of a bubble economy would bring serious result to financial system and economy. As the real estate is the basement of our country's economy, it is in the stage of rapid development accompanied with the development of national economy nowadays. But at the same time, by the soaring of housing price and real estate, property bubble have attracted more attention than ever. The problem of whether bubble really exists and whether the real estate market is healthy has been the focus of the argument. In order to find out the answer, I explored the Xiamen's estate industry in the years of 1990 to 2005.Starting from the summarizing of the theory of property bubble and real estate bubble, the paper employs quantitative method of analyze the station of Xiamen's real estate market in 1990-2005 from investment, demand, price, financial situation and market character. Next, the paper estimates the bubble through three different bubble-test methods to find out whether the real estate market is overheated. Last, by compare the theoretical and the real marginal return rate of real estate, we make out the final conclusion of the question.The research get the conclusion that: in 1990-1995, some bubble existed in Xiamen's real estate market; in 1996-2001, the market is in the period of self-adjustment; as to the recent years, the sustaining boom of the real estate market since 2002 doesn't mean to the bubble, because the values of several bubble-index still in the rational range. The existent problem doesn't lie in gross, but the unbalance of market structure and product quality.Up to the present, the researches on the Xiamen's real estate market have mostly rested on the qualitative analysis. This paper analyzes the real estate market quantitatively. Using market amendment analysis is one of this paper's innovations. Last, the advice recommended by author for bank to avoid financial risks is useful.