Reaearch On The Situation And Bubble Of Nanchang Real Estate Market

Since 1998,China started to promote housing reform,which led real estate market developed rapidly and soon became the pillar industry of China's economy.However,due to the unsound market operating mechanism,lack of supervision,and some other reasons,China's real estate market shows an unhealthy situation,with the head problem that the housing price rising too fast.Actually,“housing price” was always the main discussed topic of Chinese public during the past two decades.The rapid growth of housing price,especially the residential housing price,bringing a lot GDP,accompanied with overheated real estate market,which would inevitably lead to a large number of rigid housing demand diverted by speculative demand.The increasing high price tend to bring real estate market bubble.It is undoubtedly that the influence of real estate bubble crisis is damaging.In fact,several well-known crises in Japan and United States in history ultimately led to financial crisis and economic turmoil.Thus,the suppression of overheated housing market and the prevention of real estate bubble are important guarantee to ensure China's real estate market being sustainable and healthy.Currently,much of domestic research about real estate bubble are focusing on first-tier cities and second-tier cities,however,this paper chooses Nanchang,a typical inland three-tier city in the middle area of China,as the target.Base on the past research about the formation,hazard and measure of Nanchang real estate bubble,this paper analyzes the current situation of Nanchang housing market,and select a series of common used indexes like housing price-to-income ratio,vacancy ratio,renting-selling ratio,to measure the level of Nanchang real estate market bubble.Meanwhile,it introduces DSSW,noise trade model into the essay,using quarterly data in the past decade to analyze the influence of non-rational expectations on the formation of Nanchang real estate market bubble and calculate the result.It can be shown that expectations of noise traders have great influence on real estate bubble.Finally,the paper makes a conclusion according to the former results and estimations.The empirical results show that the housing price in Nanchang has witnessed a rapid rise since 2005.From 2005 to 2010,the market bubble was brewing and most buyers were in hesitation,the year 2009 might have foam.While during the next five years,the amount of noise trade was increasing and the market bubble gradually emerged,especially in the year 2011 and the year 2013.At the end,the paper puts forward some policy suggestions such as improving land management,perfecting housing security system,regulating real estate tax,strengthening market supervision,and controlling financial risk according to its conclusion and the actual environment of Nanchang.