The Analysis Of Real Estate Finance Market In China

The China real estate finance market started late, but kept its momentum of development. In recent years, it almost became a pillar-based industry in the country. However, there are some problems in the process of rapid development, for example, the inadequate financial system, the imperfection of supporting policy measures and institutions, the high price, and the bubble economy risk, etc, and all of above are hot issues in social sectors.In the first place, this essay will introduce the background of the China real estate finance market in recent years, the main focus is house prices rising. The property market rapidly declined in the global financial crisis which is triggered by the sub-prime mortgage crisis in 2007, and also met the winter season in 2008. Therefore the state made some adjustments in policies by using macro-control to stimulate the property market. In 2009, the property market started to turn lifeward from deep recession, but the fast rising house prices led to the social controversy. In this background, the study of real estate finance market in China is quite important. Meanwhile, most of the inside and outside scholars'studies and researches are worth to learn, so base on these theories and the current situation of real estate finance markets in China, the author try to use the proper method to analyze and solve these problems.Secondly, this essay comes from the realities of real estate finance, using the analysis of real estate industry process to identify and analyze the key points of the section and then try to find a solution. In the process of real estate development, land reserves and the transfer is the first part, and hence the first question--the land system problems. As a result of local governments pursue political achievements; the "land finance" is very serious which makes the land sector have to take bank loans.According to the analysis, we can figure out that the bank credit is the most important link in the process of real estate industry. In order to make the bank credit achieve the stable and efficient services for the real estate industry, the commercial banks need the new requirements for self-development. In the process of real estate sales, the pre-sale system and the "two sets of mortgage" policy have been the key policy for the real estate finance market, but there are still many problems in the development and operation processes. From the whole perspective of real estate process, the own operation of the real estate company plays an important role for the development. As for the real estate company, the source of funding is the key to the survival of sticking point. Certainly, simply rely on bank credit financing model is not desirable. According to the experience of real estate in Western developed countries, the article introduce several successful financing mode , including real estate asset securitization , public finance and project finance, hoping for make reference to the real estate financing development in the future.For the second time, the essay analyzes the double attribute of the real estate property which leads to an important factor in high prices. Because of the feature of investment goods ,the real estate industry attracted many Speculators entering to make a profit rather than truly effective consumer demand. The increased demand led to the high price and promoted the production of a bubble economy. Then in the process of analysis of the real estate finance market situation , the essay also introduces the whole processes disassembly instructions of the key issues in details ,including the self-operation of commercial banks , real estate land system , the pre-sale system and the "two sets of mortgage" policy. Commercial banks have some technical problems in their management, under the circumstances that the real estate industry makes major source of inherent funds from banks which make risk concentrate on banks and financial insecurity problems are serious. The main problems of real estate land system is that the government sells more land blind and raises the land prices for earning the land finance which is one reason for the high prices in recent years. The problem of real estate sell system is not the system itself, but the poor enforcement and supervision, inadequate policies and supporting regulations in the development of pre-sale system in our country. These problems lead developer of moral hazard and infringement of the interests of the consumers. The "Two sets of mortgage" policy was described as a barometer of the property market, which also shows the importance of the policy to the property market, the key is how to define the two suites, that is the correct distinction between investment and consumption of housing. It plays a key role to the effectiveness of policies.Once more, through the advanced experience of the foreign real estate to introduce some more advanced international financing model for our real estate business and real estate finance markets to find innovative financing model diversification goals, compared to the current financial market problems. The real estate finance market in China started late , so the supporting policies and institutions are imperfect , and lack of a mature secondary market for real estate .Some listed companies have the short-sighted behavior in their self-management , they only focusing on immediate interests , excluding their long-term development ;what's more , the lack of authoritative financial intermediaries have to make these innovative financing difficult to implement in our country, the capital markets and the financial markets institutions lack connection.Ultimately, as to the countermeasure of the real estate finance market which comes from the above analysis, the author will try to find a concrete way which is divided into real estate monetary policy, suggestion of real estate development and the proposal of market mechanism which suit the specific conditions of our country.The real estate monetary policy include that the pre-sale system and the "two sets of mortgage" policy. The main problem of real estate land system is that the government sells more land blind and raise the land prices for achieving the performance of officials. If we want to work this out, firstly, we should divide the land finance and local finance to make special funds for special use. Secondly, we should establish a rational system of urban planning and layout from the perspective of long-term development of the optimal allocation of land resources. Lastly, we should establish a sound legal system. Main problem of the pre-sale system is that the developers are out of control and detrimental to consumer protection, so the solution is: on the one hand, establish a strict censorship of industry which can make sure the fair market competition to limit the unqualified company to enter the market; on the other hand, establish the monitoring management system to manage the income of pre-sale, meanwhile the moral hazard of developers to harm the consumer's benefit. The "two sets of mortgage" policy has an obviously regulation which is based on the distinction of two sets , multiple sets, improving type and investment of housing, and also influenced by adjusting of down payments and interest rate.The subjects of the China real estate system are real estate companies and commercial banks. Comparing to developed country real estate, we can clearly see the shortage of our country, which is mainly about the lack of consideration of long-term development of enterprisesIn addition, the simplification of financing restricts the sources of the funding. Enterprises should improve their own management, focus on the future, brand itself and develop into a large enterprise constantly. There are a lot problem of China's commercial banks, just like unfinished buildings, fake mortgage loans, bad debt and dead debt, all of these express that banking system has the problem both in technique and management. The commercial banks should find way out through technical and manageable innovation. The technical innovation applies diversified financing to serve the company and benefit the bank. The innovation of management can reduce the loophole and loosing in management.Generally speaking, the problem of China's real estate is the problem of the real estate finance market mechanism. The real estate markets of developed country have many ways to raise money, for example, asset securitization, public financing and Project Financing, etc. But in China, we are lack of mature secondary market, authority of financial institutions and diversified financing model, otherwise, the policy and the rule of the real estate finance market is imperfect and the management is unregulated. This requires China's real estate market study and practice to improve the mechanisms constantly, in order to adapt to the asset securitization, public financing and project financing quickly.