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Introduction

Analysis on China real estate industry Under comparison of Japan’s Bubble Final Five 2010/3/31 Table of content Introduction 3 Executive summary 3 Real estate bubble measure analysis 4 1) Model Building 5 2) Fixing on the coefficient —-Base on AHP 7 3) Data analysis 10 4) Conclusion: 14 Causes of Bubble Analysis 14 1) Characteristics of land resources 14 2) Characteristics of the real estate market 15 3) Factors of Financial Institutions 17 4) Government Factors 18 Trends Analysis 19 1) Chinese Government’s Control on Financial Systems. 19 2) The Difference of Urbanization 21 3) The Difference of Demographic Structure 22 4) Monetary and Exchange Rate Policy 23 5) Investment Demand in China 24 Conclusion 25 Recommendations to Deflate Bubble 25 1) Reinforce the supervision and control of real estate market 25 2) Strengthen land resources management 26 3) Build up a sound forecast system for healthy development of property industry 27 4) Strengthen supervision on finance sector and prevent loan risks 27 5) Keep the RMB exchange rate’s long-term stability 28 Reference: 29 Appendix: 30 Introduction Nowadays, the topic about Chinese real estate market could be the hottest. We have done some research on the Chinese real estate market in this report, and we would like to focus on the Chinese real estate bubble analysis. Firstly, we built a real estate bubble measure model, we tended to find whether there existed bubble in Chinese market and its trend in quantitative view. Secondly, basing on what we did before, we would do the causes analysis and trend prediction focus on the Japan and Chinese market, and a recommendation would be given at last. Executive summary As the capital market developing fast, the real estate is playing a more and more important role in Chinese economy. Recent years, the price of houses in some area of China has raised a lot. The public including many researchers doubt that there exist real estate bubble in Chinese market, and they worry that Chinese could step in the Japanese footsteps twenty years ago. . read more.

Middle

The above factors interact and ultimately lead to more severe market conditions in short supply. Finally, the expectations of price rising ultimately become a reality. Structural contradictions existing in China: People’s needs in low-cost, small and medium size apartment are in serious shortage of supply, while the luxurious and large size apartment (90 square meters) of high-end housing supply is above normal. Currently the ratio between the two is about 3:7, while the ratio of residents in low-income persons with high income is about 8:2. Structure of housing and income structure is on the contrary, and even serious dislocation. This not only resulted in shortage of effective supply, but also promotes the rapid rise in house prices. 3) Factors of Financial Institutions Financial institutions play an important role in the real estate market. First, in the process of socio-economic development, financial institutions themselves are also facing rapid development time. They need to continuously expand their business, and the market demand for its own expansion has brought about a series of changes. In addition, the bank creates a very favorable loan terms to land developers, up 70% premium to the equivalent of a loan can be offered by government. Investors who obtain loans can purchase land for further development. At the same time, we note that recent two years, the state enterprises which are been titled as land lord frequently appear. It is mainly because the government relaxes the conditions of bank credit and the most beneficiaries are those large state enterprises. Loans from banks flow into those enterprises, making the central enterprises have money to buy, forming one after another land lord. Land bubble planted a hidden danger for the real estate bubble. Third, financial institutions’ strong support of the real estate development create very favorable conditions for speculators, resulting in sufficient funds for housing exchange, led to further real estate bubble. Fourth, bank lending gives people good expectation for real estate. . read more.

219.235.129.58/welcome.do Appendix. Final Five. 24 . read more.

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