Credit Expansion Of Real Estate Prices Affect Research

Real estate is a capital dense industry whose funds are provided by finance institutions. A contradiction is emerged: the development of real estate will lag without financial support; excess of financial support will lead to real estate prosperity, even price rise. Dramatic fluctuation of real estate will seriously damage society and economy. In recent years, the real estate price ascends and the credit risk piles up as the real estate credit increases. Therefore, this thesis aims to study the relationship between credit expansion and the rise of real estate price.What is the forming mechanism of credit expansion to real estate price? What is the situation of real estate credit and price in China? What is the influence of credit expansion on real estate price? All these questions are worthwhile to be discussed. This thesis, based on a brief summary of relevant theories and phenomena of real estate credit and price in China, applies methodologies of Game, Local Balance, Co-integration and comparison to theoretically explore the mechanism of rise of real estate price in the environment of credit and empirically probe into the relationship between credit expansion and the rise of real estate price in China.Both theoretical model and empirical result reveal that real estate credit expansion is essential to the rise of real estate price. Finally, this thesis attempts to provide some beneficial suggestions of financial credit and industrial development strategies through summarizing of internal experiences of credit expansion and real estate price.