A System For Early-warning Of Real Estate In Shanghai

The real estate industry as an important component of China’seconomy, its healthy operation is very important not only for China’smacro-economy, but also for every social aspect. In China, real estate hasexperienced more than ten years’ prosperity, which makes peoplenowadays worry about system risks of property even more. Lots ofeconomists start to bearish China’s real estate.Based on this background, this dissertation is about to design anearly-warning system that can identify and predict potential risk of realestate, so that we can use it to help us make policy and investment choice.However, China is too big to be forecasted as a whole, and this paper isconsidering to design a warning system for forecasting Shanghai propertyindustry.The first chapter of this paper introduces background，significanceand logic framework of this research, as well as extensive warningliterature from China and abroad. The second chapter has studied thetheory of the real estate industry. The third chapter compares and analyzesthe selection method of early-warning indicators, and also screens thevariables of warning system. The fourth chapter is key chapter, whichanalyses time series correlation of the basic variables. After that, itconstructs a set of early-warning signals, adopts the3-sigma method,normalizes as well as adjusts the early warning signal values, and alsodivides early-warning domain. The fifth chapter composes the simpleearly-warning indices and the comprehensive weighted early-warningindices of Shanghai city, and dose empirical interpretation job about thesetwo indices. The sixth chapter is the summary of the whole article. Through this research, and qualitative analysis, this paper predicts:1.Shanghai real estate may show the differentiation trend in the near futureaccording to the region;2. Nationwide, especially in small andmedium-sized city, the possibility that property industry will touch bottomis quite big.