The Study On Industry Organization Of The Real Estate In China

In this paper, I used the "Structure—Conduct—Performance" paradigm to analyze the real estate industry organization in China. Through the research I found that the market structure of the real estate industry is the regional oligopoly market, because each real estate has the difference compared with other real estate, and real estate can not free move like other goods. As real estate enterprises played a role in the integration of resources and it's operation has high debt ratio features, the necessary amount of capital, technical requirements and economies of scale don't constitute the entry barriers of real estate industry. The main entry barriers are the land transfer system in China and that those real estate enterprises which had occupied market share of the real estate market boycott to the potential competitors. In such market structure, the real estate enterprises have market power. They can set the price at a higher level, or make different price according to people's different preferences, so that they can obtain high profits. In recent years, China's real estate industry had been developed rapidly, and the real estate enterprise's profitability continuously enhanced. But the sustained high prices and the high vacancy rates affected the healthy development of the real estate industry. The government should regulate the market competition, and use the land policy, financial policy and tax policy to make the development of real estate on a healthy way.