Research On Beijing Real Estate Bubble

With the accelerating of urbanization, the increasing of residents’income, especially after the "40 million" investment, the real estate price began to rise faster. This article relies on Beijing real estate market, setting up linear model which is based on DSSW and Blanchard mathematical model. Then I use time series data to analyze Beijing real estate market bubble, and establish the VAR model of different factors. After Granger Causality Test and impulse response function analysis, research shows that:the Beijing real estate market speculation degree is high; house price growth rate of the previous period and the residents’ income level is the granger reason of rising prices, and in the long run the two factors will push house price higher.At first, this paper describes the research background, and former study of bubble; then introduces real estate feature, China’s real estate industry situation as well as China’s real estate industry development.Then, from the perspective of the real estate bubble at home and abroad, the article carried on the thorough introduction and definition of the bubble theory, specially analyzes the fashion model, noise traders model (DSSW), and commonly used bubble measure, establishing a theoretical basis for empirical analysis. Through that part of the inquiry, we found in the fashion model, the bubble is derived from the difference between asset price and actual; In noise trader model, noise traders will estimate asset price wrongly, causing real estate price deviating from the basic value.On the basis of theoretical analysis, this paper sets an Index system of Beijing’s real estate bubble. From the four indicators, I found that Beijing real estate market exists a certain degree of bubble; to explore the level of the bubble, I use the specific factors, and set up model based on Blanchard mathematical model, and find a way to determine degree of speculation in the property market through the reasonable assumption. Then calculate Beijing real estate speculation degree through the time series data. In order to further explore the impact of specific factors, the article establishes the VAR model, and analyzes how the income and previous period growth impact the price through the granger causality test and impulse response function. Empirical results finds that growth rate of the previous period and income level is the granger reason of home price; In the long run, the income makes real estate price have high; when the prices of the previous period growth rates have a positive impact, house prices will rise.Finally, with the empirical results, this article put forward policy suggestions from the aspects of finance, tax and land policy.