Research On The Formation Mechanism Of The Real Estate Bubble And Countermeasures

In recent years, China's real estate bubble has been concerned as an Economic hotspots by the whole country. The housing problem has become the most serious livelihood issue. Correspondingly, however, land prices and housing prices keeps on rising, even economic growth is increasingly dependent on real estate. To analyze the formation mechanism of real estate bubble, therefore looking for ways to eliminate the bubbles has very important theoretical and practical significance today.In this thesis, we use statistical charts, supply and demand model combined with theoretical analysis, to describe the formation mechanism of the real estate bubble. The commercial residential building has both consumption property and investment property, As consumer goods, there are rigid demand and monopoly supply in the market, which is the basic reason of the rising of real estate prices. As capital goods, the expectation of rising prices leads to a large entrance of speculative capital, which continues to boost prices. Monopoly profits on the commodity market and wealth transfer effect on the capital market, finally cause the housing bubble.By analyzing the effect of the participants involved in real estate market, this article described their behavior: the monopoly, speculation, and the benefit relating between them. Proposed that to break the monopoly and to eliminate the speculation is the key to crack the real estate bubble.As the current real estate industry and national economy are closely linked, if take strict measures to burst the real estate bubble will affect the economic development. Therefore, we proposed that appropriate measures should be taken to achieve a soft landing of real estate prices. And the key to achieve a soft landing is to keep a good balance between reducing housing prices and maintain a stable and rapid economic development of the country, And we put forward five specific policy recommendations.