Empirical Study on the Real Estate Bubbles of Chinese Main Big and Middle Scale Cities

Since 2002, whether existing bubbles in Chinese real estate market has been a controversial question. On the one hand, the real estate management organs and enterprises deny the bubble's existence. And on the other hand, all consumers consider that there has big bubble in real estate market based on soaring real estate price nowadays. Scholars in economics also have different opinions on this theme. The paper tests the stationarity of real estate's market price time series and theoretical price time series and the conintegration relationship between the two series of Chinese 35 main cities, include 30 provincial capitals except for Lasa City and 5 cities of planning individually (Dalian, Qingdao, Shenzhen, Ningbo, Xiamen), by the method of unit root and cointegration test. And the test results show that bubbles exist in all of other cities' real estate market except for Taiyuan City, that is to say, the existence of urban real estate market bubbles is a general phenomena in China. If analyzing from the change trend of real estate market price latest months, we find that only few cities' market price, such as Shenzhen etc., has decreasing trend and almost all cities' market price still increase steadily, which provides an evidence that real estate market bubbles of most big and middle scale cities will keep on a period of time. The paper suggests that Chinese government and real estate industrial organs should emphasize macroeconomic control and management, and lead consumers and investors correctly, to offer a good micro and macroeconomic environment of real estate market; at the same time, the government should perfect data statistic system and information release system so that to offer a good condition for analyzing and alarming real estate market problem