Research On Market Risk Of China Real Estate Investment Trust

As a pillar industry of China,the real estate industry has promoted China's economic growth.However,the real estate industry is facing a huge funding gap due to the CSRC's restrictions on structured financing and real estate bonds.The excessive dependence of the real estate industry on bank credit has worsened the financial structure of financing companies and increased China's financial risks.In addition,excessive currency and the lack of high-quality investment targets in the market have made real estate a hot spot for investment,which has also boosted house prices.From the experience of foreign countries,the emergence of real estate investment trusts(REITs)has solved the problem of housing financing difficulties,strong demand for real estate investment,and increased real estate financial risks.Since the introduction of the concept of REITs in the Mainland in 2002,all parties have different ways of practicing REITs.First,the domestic “REITs” products have been promoted.Second,domestic real estate projects have been listed in the overseas market in the form of REITs,which are in line with the international REITs market.Based on the overseas mature REITs market,many research literatures on REITs have been accumulated abroad.There are also some scholars in China who conduct research on REITs,but most of them do not go deep into the quantitative analysis.At present,eight mainland REITs have been listed overseas.This paper combines theory and market real data to explore and research issues related to REITs market risk,and hopes to find an objective basis for market risk management and control in the process of promoting REITs in China.This has theoretical and practical significance for China to further promote the development of REITs.This paper uses a combination of theoretical analysis and empirical research to study the market risk factors affecting the yield of REITs in the Mainland.The empirical analysis can be divided into two parts.The first part analyzes the impact of inflation,economic fluctuations,house price fluctuations and interest rate fluctuations on the yield of REITs in the Mainland by constructing VAR model.The second part selects the DCC-GARCH model to discuss the mainland REITs and the Hong Kong and Singapore stock market.The dynamic relevance of the securities market.The main conclusions of this paper are as follows:(1)China's REITs are affected by economic fluctuations,followed by housing price fluctuations.(2)REITs yields show a positive correlation with inflation and can withstand inflation.(3)The correlation between REITs' yield and the securities market is low,showing the weak correlation with products such as stocks and bonds.Finally,the article puts forward relevant policies and suggestions based on the current market environment and empirical conclusions.