Research On Financial Risks Of Real Estate Of Our Country And Precautions

Since China’s housing reform in1998, and the implementation of commercial residentialbuilding, China’s real estate industry has entered a stage of rapid development for more than10years. Today, real estate has become a pillar industry of China’s economy, with its longindustrial chain, and related industries. The annual growth rate of investment in real estate inrecent years has remained at more than20percent, which contribute a lot to China’s sustainedand rapid economic growth. However the development of China’s real estate financial isrelatively late and the level of development is relatively low. There are many problems: theentire real estate development and sales in every aspect depends too much on loans fromcommercial bank; the management and risk management of commercial bank are notscientific; the government’s macro-control policy is not timely. All of these has brought ahuge potential risk for China’s real estate finance. In view of the huge destructive power of theAsian financial crisis and the U.S. subprime mortgage crisis, we should pay enough attentionto these potential financial risks.Then, what are the differences between China’s current real estate financial risk andforeign risk, and what kind of countermeasures should be taken for these real estate financerisks? This article is trying to solve these two problems in the background mentioned above.The paper starts from the basic concepts of real estate, real estate finance, real estatefinancial risks and so on. Through the index system of the dependence degree of China’sfinancial sector on the real estate industry and the data analysis, the paper reveals the changein trajectory of China’s financial real estate; then by referring to the specific analysis of theevaluation research and precautions of the risk of real estate finance and the financial crisistriggered by the real estate of the United States and Japan, two countries on the evaluation ofresearch and prevention, the paper focuses on the formation and characteristics of China’s realestate financial risks. Finally based on analyzing the causes of the risk, the article proposesthe solution and countermeasures which are suitable for controlling and preventing the risk ofreal estate finance in China from the following aspects: focusing on establishing the soundlegal and regulatory environment; strengthening the operations and risk management ofcommercial banks; supervision departments strengthening financial supervision; governmentstrengthening the real estate macroeconomic regulation and control efforts.