The Mechanism Of China’s Residential Real Estate

With carrying the urban housing institution reform forward in the last thirty-three years, housing real estate plays more and more important role in the social economy. Its fluctuation affects not only Chinese national economic and financial safety, but also living level of residential households. Over the past thirty-three years, the real estate industry has not only profoundly changed the face of our cities and promoted the process of urbanization, significantly improved the living conditions of residents and improved the standard of living of consumers.But in comparison to our achievements, because China’s real estate industry is still in the developing period, the development of the real estate industry and China’s urban housing institution reform are confronting some problems. The price of residential real estate in our country has been keeping on increasing ever since2003. Real estate prices growth rate far exceeds the income level of growth rate that a large number of middle-income level consumers can not afford the price. Because the price is the key of the market, to understand how Chinese residential real estate market mechanism performs becomes very important.Based on the reality of China and the research results at home and abroad, this paper chooses the price of the land, GDP, disposable income of urban residents, rates, taxes, investment market levels, indemnificatory housing market as the main influencing factors of China’s residential real estate market mechanism and tries to find out how different factors influence China’s residential real estate market mechanism.The purpose of this paper is to understand how China’s residential real estate market mechanism and the price formation mechanism perform. This article also is added to the government and the capital market factors to analyze the price formation of deep-seated reasons. This article uses linear regression model, panel data regression model to the analysis of real estate price formation mechanism. Meanwhile, the article also uses inductive methods to analyze the real estate price formation mechanism’s rationality. Besides, this article makes a market segmentation of residential real estate, by dividing residential real estate into commercial residential real estate market and indemnificatory housing market, in order to make clear different market’s mechanism.In the end, this article gets a conclusion of China’s residential real estate market mechanism and gives suggestions on how to improve the China’s residential real estate market mechanism and the indemnificatory housing market mechanism.