Study On The Evolution And Suppression Of Chinese Real Estate’s Financial Risk

Since 2003, there is a trend that China’s real estate price has increased rapidly, the real estate bubble has expanded, real estate’s financial risk is accumulating. The high real estate price has caused many serious social problems, the whole society are widely concerned about the fluctuation of real estate price. When real estate bubble expands to a certain degree, with the downturn of macroeconomic growth, the tightening of real estate regulation, the shrinking of working-age population, and other environment changes, the inflection point of price falling maybe come quietly. When the real estate market has come to a huge shock, the market is extremely prone to be panic. As a result, the price will drop rapidly, and other associated problems will appear.This paper takes the real estate’s financial risk as the object of stud y, makes full use of the experience and lessons of Japan’s real estate bubble in the 1980 s, discusses the potential evolution of C hina’s real estate bubble, and also shows the dynamic process indirectly that from generation to expansion, until burst of rea l estate bubble. Under the premise of analyzing the basic situation of China’s real estate market, this paper applies these methods of mathematical model, empirical research and so on, studies the relationship between fluctuation of real estate price and financial risk. The research content is the formation and conduction of real estate’s financial risk, including researches of the reality and empirical level. The former tells the nature and causes of real estate’s financial risk, and describes the mechanism, path and effect of real estate’s financial risk spreads to financial system or macroeconomic; the latter makes the empirical research about causes and transmission effect of real estate ’s financial risk. Finally, through three aspects including the suppression of over expansion bubble, the cut of risk’s transmission path, the strengthen of market supervision, the paper puts forward advices to curb real estate’s financial risk.Through above mentioned research, this paper finds that: the real estate bubble is conducive to the growth of domestic economy, while the over expansion of real estate bubble will threaten the sustained and stable development of industry. The real estate market is greatly bound up with the financial system, these factors such as the excessive financial support are leading to real estate bubble, real estate bubble maybe burst finally, real estate’s financial risk will accelerate release, spreads to the banking system and related industries, and makes the shock of the financial system and macroeconomic. Thus it will affect the stability of financial and economic ultimately. The empirical research also finds, the credit support of financial institutions, the basic situation of real estate market, land element, government’s behavior, macroeconomic and so on, are the important reasons for the formation of real estate’s financial risk, and C hina’s falling price has some features including the push of credit, speculation, cost and so on; real estate’s financial risk also has significant contagion effect of financial system and macroeconomic.