Research On Risks Of Real Estate Finance Market

We are all facing the global phenomenon in 2008, which is called Economy Crisis. When it happens, the prices of consumptions, industrial materials and real estates will drop down; both the demand and supply of markets will shrink. The exploding of global economy crisis disturbed the development of economy, which appeared the lack of confidence and the fears in the markets. This global economy crisis was raised by the crisis of sub-prime mortgage loan in the United States. The crisis of sub-prime mortgage loan is not the as it appears that the real estates prices dropped while the interest rate rise. Its essential reason is the break of credit, the ignorance of supervision, over loan and mortgage, which is actually the crisis broken from the real estate market. As it appears, the real estate financial market unavoidably undertakes high risks when it financing the rapid expansion. Once the risks break, the crisis will suddenly affect all the financial system as well as the whole nation.Actually, China's investment of real estates is growing rapidly, and the construction of real estates is a leading industry in the national economy. Meanwhile, the real industry is also a high-input and high-risky one. But the sudden growth will certainly raise the problem of depreciation of commodity houses, over supply of real estates etc. The appearance of financial risks revealed the immaturity of China's real estate finance market. The sudden growth, over investment in some particular region, the lack of capital in real estates as well as the imperfect structure and function of China's real estate financial system which still cause financial risks in developed western countries, will make conflicts even harsher in China's real estate financial system. So, it is high time to take effective measures in order to prevent the above risks.This assay mainly conducted a theoretical study in China's real estate financial market, the formation and features of the risk rose in this market, and the measures to prevent the risks. This assay especially analyzed the risks occurred in the real estate finance market, and then creatively discussed the availability of launching REIT in China and the main limitation of it currently.There are four chapters in this assay. Chapter One indicates the background and motivation of the whole assay, and then illustrates the methodology, creational part and the limitation of this assay. Chapter Two defines the financial risk in real estate market, and gives the character of the risk. After that this chapter reviews the theories and studies on this field. Chapter Three profoundly illustrates the risk conditions and the causes of this risk. Chapter Four gives the conclusions that the risks uneasily noticed will occur when the new products mushroomed in the real estate financial market. While the financial creation is challenging the cautious principle, we should be rational to the relationship between financial creation and supervision. And China now has not well established the real REIT because of environmental constraints. At last this assay makes the corresponding recommendations according to China's macroeconomic situations.From the above, the risks will more easily occur in real estate financial market when the financial creation and openness are intensified. It is essential to adjust the financial supervision in order to adapt the development of creation. And the financial supervisory institutions should also to acquire the creation trends timely, and take adequate measures to promote the healthy development of China's real estate financial market.