By Wang Wei, Deng Yusong & Zhao Yong, Institute of Market Economy, DRC

Research Report, No.79, 2018 (Total 5354) 2018-5-8

Abstract: China’s real estate market is in the transition period facing problems such as the unsustainable development model of “land-based development”, and the mismatching conflict between supply and demand. From the international experience, the bursting of real estate bubble will have disastrous effect on economic development. At present, the real estate market has become a key risk factor affecting the financial and economic stability in China’s economic transition period. Although the risk is basically controllable in the short term after the implementation of regulatory policies, it is necessary to pay close attention to the risk that may be caused by fast-rising household leverage rate and the abruptly reversed real estate market expectation. In the next phase, we need to accelerate the formation of the housing supply system with various types of major suppliers, multi-channel guarantee, and rent and buy pattern, further strengthen the land, finance, and taxation systems, push forward reform of the real estate market regulation and management system, improve market monitoring, early warning, supervision and communication mechanisms, and accelerate the improvement of financial supervision systems and other measures, so as to curb the risk of real estate market bubbles and promote sound and steady development of the real estate market.

Key words: real estate market, risk of economic bubble, economic and financial stability, policy option