Research On The Mechanism Of Real Estate Crowdfunding Operation In China

The real estate industry,in its nature,is a typical capital-intensive industry,requiring large investment in earlier stages with long investment period.After decades of rapid development,the real estate industry has undoubtedly become the one of the pillars in China's economy.However,due to the tightening of bank loans,changes in supply and demand,the market expected to fall,the problem of illiquidity of the real estate companies become obvious since 2014.In fact,the real estate companies long experience many financing difficulties such as single financing channel,high financing costs and financing risks.In such circumstances,these companies are in urgent need to have a new financing model to ease the current problems.Meanwhile,as the internet financing gains increasingly attention,the crowd-funding emerges as the times demand.And now this new financing model becomes popular in China and is gradually adopted in the real estate industry.2014 is beginning of China's real estate crowdfunding.In the past three years,China's real estate crowdfunding has achieved great development.As of the first half of 2016,the real estate crowdfunding raises a total size of about 2 billion 100 million yuan from public,the participatory platform add up to 34,provides a big financial support for 330 projects,but in view of our country real estate crowdfunding's explosive development,there is no academic research on the financial theory basis for it's development.Hence,in this paper,approaches of qualitative analysis and comparison analysis are adopted in order to deep analyze the economic reasons that crowdfunding is suitable to applied to China's real estate industry,this analysis breaks the drawback that the previous researches usually focus on the surface and concludes the internal operating mechanism of the development of our country's real estate crowdfunding:(1)The real estate crowdfunding provides a low-cost,efficient financing channels and save their marketing costs for financiers;(2)The real estate crowdfunding broadens the channels to invest,reduce their consumption costs and make them owns better quality housing for investors;(3)The real estate crowdfunding can alleviate the problem of asymmetric information,and reduce the bad motivation of raisers to reduce the moral hazard.At the same time,the case analysis also verifies the real existence of the operating mechanism,and reveals that the real estate crowdfunding has comparative advantages in financing costs,convenient financing,consumer quality,risk prevention,also points out that it is a more efficient business model.During case analysis,we also found some problems in the development of real estate crowdfunding,this paper puts forward some suggestions for it:(1)Strengthen the supervision of the project operation,improve the transparency of the project information,reduce moral hazard,to provide a fundamental guarantee for achieving a balanced and win-win risk and return of all participants;(2)Expedite the issuance of standardization legal documents and establish a complete credit evaluation system to provide a good external environment for the health development of the real estate crowdfunding;(3)Pay attention to the innovation of transaction structure,promote the application of real estate crowdfunding in the small and medium-sized real estate enterprises so that more participants can enjoy the benefits that the real estate crowdfunding brings.