Research On Real Estate Bubble Measurement In First-tier Cities

Since the implementation of the housing commercialization system in 1998,China's real estate prices have continued to rise,indicating the possibility of a real estate bubbles.The healthy development of the real estate market is related to the national economy and people's lives.The problem of high housing prices is particularly prominent in first-tier cities.Therefore,this paper takes the first-tier cities as an example to study the existence and severity of real estate bubbles in first-tier cities.This paper first introduces the meaning of real estate bubble,the properties and harms of real estate bubble.Then introducing China's real estate industry.Next,the paper uses the housing price-to-income ratio,the ratio of real estate development investment to GDP.the ratio of real estate development investment to fixed asset investment and the ratio of real estate price growth rate to GDP growth rate as reasonable indicators to measure the real estate bubble.And analyze the real estate bubbles in first-tier cities.Then the paper uses the benchmark price method to divide the real estate market price into two parts:the benchmark price and the bubble.According to the cointegration theory and the vector error correction model,the long-term equilibrium price of real estate is obtained.Then compare benchmark price to market prices to get a more intuitive real estate bubble.It is found that the bubble fluctuation trends of the first-tier cities are similar,but the fluctuations of the bubbles vary greatly.Finally,this paper compares the comprehensive index obtained by the index method with the real estate bubble obtained by the benchmark price method,and finds that the bubble trends obtained by the two methods are basically the same.