Empirical Research Of The Real Estate Bubble Measurement Model Based On Indicator Method

In recent years, the shape raised of housing price became one of social issuesand attracted more public concern while national economy developed rapidly. Asone of China’s pillar industries, the real estate industry marketization has madetremendous contributions for China’s economic development. Real estate industry isrelated to more industries, the development of real estate industry also lead to thedevelopment of other industries. But we cannot ignore that the real estateover-development had brought many social problems. Public opinions for the highprice were complaining and the discussion about whether the market has bubble hasnot yet formed a conclusion.This paper cleared the basic concept of the real estate bubble by analysising thedifferences and connections of bubble and real estate bubble based on related researchat home and abroad; described the features and performance of the real estate bubbleaccording to historical events and summary of the literature review; presented ahierarchical model of the real estate market participants and a real estate bubbleevolution model to describe the evolution and analyze the causes of the real estatebubble based on the real estate operating cycle, the four-quadrant model and thecobweb model.On the basis of theoretical research, this paper studied HangZhou real estatemarket (2001to2012) approach to empirical research by using integrated indexsystem empowered by PCA-LP model to measure the HangZhou real estate marketbubble composite index over the years. Through the empirical research, we found thatthe composite index without severe fluctuations which indicated the level of realestate development was stable and there is no price bubble in the measurement periodbetween2001and2007; we also found there were some housing bubbles in2008to2011, especially in2008and2010; Since2011the government has increased effortsto control real estate market, the2012bubble comprehensive index rapid declined tolow level, indicating control policies on the real estate bubble and the real estate pricecontrols have achieved some success. Based on the comparison between empirical results and the standard value ofeach index, we analyzed the impact factor of HangZhou housing bubble and dividedinto macro factors and real estate factors. This paper also proposed some copingmechanisms according the real estate factors, had important practical significance toprovide a theoretical basis for government regulation initiatives to control the realestate market operated smoothly. Although this article measure object is Hangzhou,the results have some limitations for other cities, but the method to establish indexsystem and the process of empirical research has great significance and referencevalue for the study of urban real estate market bubble universal measurementmethods.