| Recent years have witnessed an increase of real estate price in China, esp. the real estate price in the middle and lower reaches of Changjiang River which centers on Shanghai which demonstrates the most significant increase. The considerable price increase of real estate has attracted the attention from home and abroad which has brought about a general discussion as to whether it will lead to real estate price bubbles. This paper takes the above-mentioned situation as the study background expounding a series of adjusting measures that government have taken to control the possible real estate bubbles and stabilize real estate price. Due to the specialty of real estate market, adjusting and control measures can not take effect right away. However, once the real estate price increases to an abnormal level, it will have a direct effect on general public's basic interest. In some cities, the price of real estate raised by artificial control does not reflect of the actual value of real estate. This paper compares the current situations of real estate development in Shanghai City and Changchun City. The author concludes that at present level the development of Changchun real estate market should learn from the experience of the developed city and summarize its limitations and shortcomings in order to prevent Changchun real estate market from taking unnecessary development levels. The main focus of this paper is to provide rationalized suggestions for the healthy and orderly development of the Changchun real estate market and valuable references for government to control house price and make out macro-control strategies towards house price.Chapter one introduces the current situation of real estate development. By comparing with development of Shanghai real estate in terms of the investment, price, demand and supply, the author tries to work out the current level Changchun real estate is at, its changing tendency and future development of the domestic real estate price. The conclusions are as follows:In 2007, China real estate market has experienced great fluctuation and a series of uncertain factors still exist. As far as the present situation is concerned, such factors as consumption level, the upvaluation of RMB, the fast increase of GDP and loan interest are affecting the tendency of 2007 real estate price in China. Whether will these factors bring continuous influence on China real estate market in 2008? How is the general trend of real estate market in 2008? These are the questions deserving the attention from government, investors and land agents. As for the general trend of real estate market, at present, real estate begins to lean from merchandizing to social security, which is due to the massive intervention from government. The author considers the government's inclination between these two will bring about considerable influence on the prediction of real estate price. If the government's inclination towards social security is gradual and mild, then the increase of real estate price in 2008 will be steady and slow; if the government's inclination towards social security is radical and revolutionary, the short term fluctuation of real estate price will be intensified.Chapter two introduces the economic bubbles existing in the real estate market of the developed city. By comparing the difference between the house rent and sale ratio and income and house price ratio, the author tries to judge whether there is economic bubbles in the real estate market. Then expound reasons of the existence of economic bubbles in the real estate market.The short supply of land is the outset of housing price increase, that is, the short supply of land leads to the contradiction between supply and demand. Once the contradiction between supply and demand appears, it will definitely lead to value fluctuation around the value curve. In addition, the price of real estate in Changchun keeps rising.The big demand of market propels the development of real estate. Recently, many house purchasers do not really in urgent need of a house, but for the purpose of accumulating property, that is, to improve the living condition or make investment. The proportion of potential purchasers who are really in need of houses is quite small. Therefore, we can see that houses in present market are not purchased by the potential buyer who need a house, but are consumed by those accumulating property or making house investment. These factors will definitely cause the sharp increase to house price.Developers control the land but refuse to build houses, which causes the artificial tension of demand and supply. On the one hand, government is trying to increase the land area for housing to alleviate tension of house price; on the other hand, developers take this opportunity to control the land, which turn the country's land resources into land reserve of developers. This enables the developers to have the control of house price and get the maximum monopoly profit, which turn the effort of country to control the house price into nothing.The proportion of affordable housing is small; its original housing leading role is very weak. Although Chinese government has explicitly stated at the beginning of city housing reform: to build a supply system in which affordable housing will be the main form, and low-rent housing supplementing. Years past, the system of affordable housing and low-rent housing is facing an awkward situation in which developers don't build these kinds of house, government authorities don't concern the problem and general citizens don't know the existence of such houses. Hence, without the support of policy housing, all purchasers, with no exception, swam into the commercial house market.Policies to real estate control enjoy much talk but little action. Facing the ever-increasing real estate bubbles, Central Bank should make out timely policies tightening up money supply to curb the rising of CPI. By 22, August, Central Bank has increase the interest rate and reserve fund four times and six times respectively, in order to tighten the mobile fund in market, but in vain.Chapter three introduces the influencing factors to real estate price. The understanding towards the influencing elements are introduced first, followed by detailed analysis of the extent influencing elements have on the price, in terms of demand and supply, administrative, economic, social, international, demographic and psychological factors. At last, the intimate relation between these influencing factors and real estate price are presented. In present study, the author find out that two kinds of elements which have an effect on real estate price play an apparent role. It can be taken that in the process of rapid development of China real estate industry, with the rapid development and improvement of price system under the market-directed economy system, the real estate price is experiencing a process of balance-seeking. Actual price change are mainly influenced by such basic factors as increasing demand for real estate arising from population growth, value raising within realty business brought about by city construction and investment. The lift of house constructing cost will propel the ascent of real estate price. In the process of price ascending, mental predict also play certain role in it, which means house price will still keeping ascending, that is, the price bubbles in real estate will keep growing due to the effect of psychological predict even when real estate price is close to equilibrium price.In Chapter four, the author combines the current situation of real estate in Changchun City, summarizes the experience and shortcomings existing in the real estate market of developed city and proposed policy suggestions towards the balanced development of real estate in Changchun City. At present, real estate market of Changchun City is in a high-speed developing period, economic bubbles still exist in the real estate price. The government should adjust, increase general commercial house supply, and strengthen the construction of affordable housing and low-rent housing and balance demand and supply by using the land resource and economical and administrative means, such as corresponding tax rate. It will provide a material foundation for controlling the over-heated real estate price and ensure a stable and healthy development of the real estate market in Changchun City. |
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