Idle Funds Impact Of The Influence On The Real Estate Bubble

With China's enter into the WTO, the domestic financial market's gradually opening up, massive international "hot money" emerges into the Chinese market. Moreover as a result of the policy-type reason, the stock market continues murky and the real estate price is soaring, so the real estate market of low-risk and high-yield, attracting a large number of domestic and international hot money. These idle funds in the purpose of speculation in the real estate market filled with large, destroy the real estate market transactions' fairness and impartiality, disrupt the normal order of the real estate market and accelerate the formation and the burst of the real estate bubble. This paper obtains from concepts of idle funds and the real estate bubble, uses a research method combined with theoretical research and empirical studies, qualitative analysis and quantitative analysis. It analyses the source and the status quo of idle funds in the current domestic real estate market, its impact on the real estate market in various forms and results, and the impact on the real estate bubble. In addition, the paper uses the quantitative indicators of the real estate bubble of idle funds to measure impact on the real estate bubble indicators and evaluation of the influence of the bubble, and then take Xi'an real estate market as an example of empirical research.Finally, a number of macro-recommendations and specific measures in view of the prevention idle funds impact real estate are put forward. With combination of relevant experience at home and abroad, the necessity and possible methods of the establishment of the real estate early warning system are analyzed.It is clearly that establishing a warning index system of real estate market (WISRM) to assist local government making decision is an arduous and valuable task, especially which can show market situation timely, concisely and comprehensively. Based on investigating history data during 1996-2006, the WISRM for Xi'an city is built up by combining principal component analysis with time-difference correlation analysis, which consists of 16 indicators sorted by time difference correlation. The SPSS software is used to carry out statistic analysis. The result accords with the practical condition of Xi'an city well, and is able to fully reflect the states of real estate market.