Research On Housing Price Bubbles And Early Warning System In Changsha

Ever since China's reform and opening up to the outside world, the government has made many benefitable trials and efforts in terms of increasing investment and improving residential conditions. Especially, as the reform of the urban housing system in 1998, gone are the years of the severe housing shortage, and the era that places emphasis on increasing residential area and improving residential quality is coming. The active residential property market drives housing price soaring up as well as improves living conditions. With the soaring housing price, the problems whether bubbles exist, and whether the housing market is rational have been brought up.The purpose of the research is to keep the housing industry healthy, by speeding up the establishment of real estate early warning system which evaluates and monitors the bubbles of housing price. First of all, the paper analyzed the current market situation from supply, demand and price in recent five years in Changsha, and discussed the development orbits of residential property market combined with the disequilibrium theory. Through empirical study on construction of demand and supply,it was found that the residential market development had undergone three stages: supply falling short of demand, supply exceeding demand and equilibrium. Further more, based on the bubble theory, the paper explained the formation mechanism of price bubbles and the primary effect of speculative demand on housing price. Meanwhile, the qualitative analysis of the price bubbles was performed, the results showing that there were certain speculative bubbles characterized by changing fluctuantly and decreasing slowly. In order to analyze the housing price impact on the residential market at different periods, by the method of time-difference correlation analysis we picked up the leading index numbers and according index numbers which were needed in the housing early-warning.The thesis introduced the Back-Propagation Network which has favorite superiority to nonlinear fitting, and constructed rational housing early warning system. The result suggests that the harmony degree of the housing market to economic fundamentals be decreasedin 2007. Finally, the paper analyzed the potential risk existing in the housing market of Changsha in combination with the above results, and proposed related suggestions for policy regulation and control to accelerate the sound development of the residential property market in Changsha.