Comparative Study On The Measurement And The Causes Of Real Estate Bubble In Japan And China

Real estate is a basic industry in China which is associated closely with otherindustries and has large contribution to economic. In recent years, high price causedconcerns of the community and far beyond the tolerance range of people. Theexistence of the real estate bubble in China has become an endurable academic topic.Real estate bubble as a mainstream has a great impact on economic. Once a real estatebubble burst in a country, the destruction and loss of this country are huge anddisastrous.The real estate bubble in Japan that occurred in the late1980s has causedthe significant damage to the Japanese economy’s healthy development which called“Lost decade”. Recently, China’s economy is similar to the situation in Japan thatbefore the real estate bubble inflated and burst. Long-term rapid economic growth,rapid expansion of industry, expansive demand for land, rising house prices, bearingthe pressure of currency appreciation. Faced with this situation, the comparison thelessons from the Japanese real estate bubble formation,expansion and shattered,whichis helpful in China’s real estate industry and the healthy development of the nationaleconomy．Therefore, this article attempts to explore three problems: first, there is a realestate bubble in China’s real estate market or not.Second, measuring and analysing thereal estate bubble in Japan and China, had a comparative analysis of the factor whichlead to the real estate bubble. Third,by drawing on the lessons learned in Japan forpreventing and responding to China’s real estate bubble and proposing solutions.Thispaper takes real estate market both in Japan(1980-1990)and China(1995-2009) asresearch objects.We selected the growth rate of investment in real estatedevelopment,the growth rate of money supply, growth rate of land acquisition cost asindicators index system, real estate commercial loans accounted for the balance of theproportion of bank loans as indicators index system,which are used in the efficiencyfunction, Obtained the extent of the real estate bubble both in japan and china whichare consistent with the actual.Then used the state-space model to measure the realestate bubble of China from1995to now, Estimated the base price of commercialhousing which is determined by the real estate supply and demand together andcompared with the actual sales price of commercial housing,then arrived a conclusionthat there also is a slight real estate bubble in China at this stage.Finally，we have had a comparative analysis of the factor which lead to the real estate bubble not only inthe same side but also in the different side and Summed up the lessons of the Japanesereal estate bubble for us and proposed concrete countermeasure and the suggestion.