Research On Credit Deficiency And The Construction Of Credit System In China Real Estate Market

As a pillar of national economy,real estate industry has a great impact on economic development and social stability.However, credit deficiency prevails in the national real estate market. Fraudulent activities such as illegal construction, houses of inferior quality, misleading advertisement, reduced living space, unfair contracts in favor of real estate agencies and delays in property management services, not only disrupt the market but also seriously harm the healthy development of real estate markets and society stability.One of the important reasons of these fraudulent activities is the shortage of credit system in the market.In this background, a profound research on the reasons of the credit deficiency in the real estate market and putting forward the counterplan suggestion will have much more practical meanings.This article from many sides elaborates the economic significance of credit in real estate markets with its essence clarified and its basic constituents proposed. Institutional economics,information economics and game theory are applied to the analysis of credit deficit in the current real estate market.By studying a game played between various parties of the real estate market and the regulatory body, and a second game between buyers and developers,we conclude that credit deficit in real estate markets is chiefly caused by asymmetric information,ineffective regulations and insufficient punishment. Finally, it proposes a credit system as a solution to the present status of our real estate market. And it also explains how such a system should be run and protected in China's market economy.