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Chinese Housing Market

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Chinese Housing Market
China Real Estate Policy Influence and Prediction
In the past 20 years, China’s real estate industry has gradually become one of the leading industries and has an increasingly important position in China’s economic development. At the same time, the real estate industry is also a source that causes an overheated economy in which economic productive capacity is unable to keep pace with growing aggregate demand. It has become one of the key industries, though it is in need of government intervention. In recent years, it is obvious that the housing prices in different cities in China continue to increase. For many buyers, a house is not a place to live, but is merchandise that can bring huge profit and is worth investing in. As a result of this over-investment, more and more people who really need houses to live in cannot afford to buy houses. The inflated housing prices bring a lot of social problems, the primary one being class conflicts. The Chinese government has already realized the problem and every year it comes out with some relevant policies to stop house prices increasing, such as increasing loan interests for buying a house, tightening mortgage limits of house loan, and shortening the installment time limits in order to discourage investment in housing. Even so, the housing price problem still is not solved. In my paper, I identify what caused the Chinese housing prices to become artificially inflated. I use my research sources to explain why some of government policies have failed and some are effective. Finally, I am going to make a prediction about the influences of new policies as well.
Recently, some experts, such as Jiaowei Shang, have pointed out the principle reason for these higher housing prices – government, especially the local government relies heavily on building industry (Davis 2). In the background of the world economic crisis, Chinese real estate is responsible for stimulating domestic demand, resisting the impact of the economic crisis,

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