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Research on Using Requirement Factor Model Method to Ascertain Real Estate Froth Degree WANG Hong Pingdingshan Institute of Technology [email protected] 467001 Abstract:The real estate froth hazard has a close relation with the real estate froth degree .Only through accurate judgment of the real estate market whether has the froth, as well as the froth degree, can we promptly take the corresponding measure to carry on the regulation to the real estate market. Therefore the real estate froth research has the important practical significance to the continually stable and health development of the national economy and the real estate industry. Through the analysis of the real estate froth and the real estate speculation and embarking from the non-speculative and the speculative demand factor which influence the real estate price, this article carries on the regression analysis using the real estate congenial price mathematical model to determine the real estate froth degree, thus we call it the demand factor modeling. Key Word: the real estate froth, the froth degree, the standard price, model, the proper method Text: , Real estate froth, as a kind of cosmopolitism problem takes on determinate "infectivity". From real estate froth, in Japan, in American, in 1990 to the financial crisis in S.E. asia, in 1997 foamy infectivity in developed and developing countries had got exemplify. Lucubrating real estate froth will be help us to hold China real estate marketable trend. Between more than 20 years from recovery to these, realty business developed fast with a rush and had great achievement. Since 1980, Chinese city population had grown up to 167 and floor surface of town dweller enlarge 25 per capita from less than 5 ,creating nonexistent wonder in urbanization history all over the world in the past more than 200 years. And importance and effect of realty business throw into relief among national economy. But realty business on the developing process exposed much lucubrating problem. In 2004, in some city, in Chinese, real estate price short-term accelerating jump triggered off real estate foamy attention to higher level and each side. Chinese real estate market, after all, has the froth or not this is a controversial focus all circles for several years. For the moment, it formed both diametric opinions, one thought that real estate froth exist, taking the lead of Chinese Academy of Social Sciences internationally some research community consider in our country real estate froth already came into being, and foretell froth should blight at not long hour offshore someone even consider Chinese be confronted with danger of real estate froth breakdown another believe that real estate froth and real estate superheat were nonentity in our country taking the lead of the specialist of ministry of construction P. R. China. But in fact, froth discussion itself has pubescences because the opinions of acceptance and rejection criteria of real estate froth varied, inland for the moment much data didn't take on comparability and stringency. On this condition, both opinions were lack of sufficient glister. So, how judge on the nose real estate market, whether presence froth as well as foaming degree for in time adopting different kinds of corresponding measure to regulation and control it it is great importance of promoting national economy and realty business spread ,stabilize and health development and ameliorating the lodging condition of more denizen. Through the analysis of the real estate froth and the real estate speculation and embarking from the non-speculative and the speculative requirement factor which influence the real estate price, this article carries on the regression analysis using the real estate congenial price mathematical model to determine the real estate froth degree, thus we call it the requirement factor model, in the hope of deepening discussion about real estate market froth. ㎡ ? , , %, ㎡ , , ; , , , , 1154 , , , , I Review of real estate froth degree determining method In developed market economy abroad, the research of real estate froth estimate approximately is divided into two kind: First is analyses from the aspect of pricing of real estate. found various computation module of basic price of real estate. contrast real price with basic price to measure degree of the froth. the second is analyses from the aspect of credit of real estate. it designs different kinds of indices to measure the degree of real estate froth. Owing to imperfect on regime and market statistics system in our country, the computation module and indices abroad cannot apply in domestic. The research on real estate froth estimate in domestic is immaturity. There are four research methods on it. the methods are as follows: theoretical price method, Monte-Carlo method, market modification method and advanced warning index method. Theoretical price method (Zhengxin Huang in 2002) is that the basic worth of physical capital is determined by the manufacturing cost plus circulation cost superadd social average profit of the assets or commercial product. It isn't determined by the yield of reality capital. Monte-Carlo method (Lin Liu etc.2003) sets up three indices, as ratio of growth rate of real estate price and real growth rate of GDP , ratio of room rate and income, ratio of mortgage charge of house and monthly profit of denizen. Using the average of three indices acts as coefficient of froth estimate of real estate. In 2004 Jingkui Zhou thinks that the price of real estate is constituted by use value of real estate and PV of present value income of anticipating capital gains of real estate. Then found a computation model concerned with denizen DI, loan rate and real growth rate of foretime real estate price. Generally, there are three vice on it. As follows: first, some estimate indices is ambiguity. the numeric of estimate indices merely have relatively sense, cannot determine the degree of real estate froth. second, lacks of syntheses estimate indices and authority and systemic statistical data. third, some indices have no relationship with estimate of real estate froth. they are estimate indices of real estate booming. The indices is overabundance and cannot use in practical application. II Real estate froth and analyses of real estate speculative Economy froth is a Phenomenon that fictitious capital excessively increases and relevant negotiation prolonged expansion. The increases disengage the rose of real capital and the growth of industry department. Financial instrument and the price landed of property rise rapidly and speculative transaction go with a bang. Modern economics defined froth as assets price durative swerve away from its functional value (use value) first it was abidance rapid rising course or state (froth melt) when assets rate disengaged market foundation, second, it was the part that assets prices subtract to the market determinative just price part. Here, assets functional value or use value or market determinative just price part, are all one notion, we were distinguished as standard price. The decisive cause conduced economy froth, was virtual demand or speculative demand speculative demand, and virtual demand overexpansion resulted in price level non-stationary rose, relative to its standard price, "buy" was in order to "sell" and make a profit for agio. Real estate economy froth was that real estate price disengaged market fundamental durative advance, caused by real estate speculation it was the part that real estate assets prices tower its standard price. In the abstract, any merchandise all have probability of occurring economy froth, and it is different that each merchandise froth generation chance probability and its incidence to national economy. In accordance with practical experience analyses of nation and regional of the world, stock and real estate are up most of generation froth probability, so real estate and stock are froth economical prime bearer or ”frequently occurred region”. The principal causes of giving birth to real estate froth was that home ownership scheme is society button-most welfare require. the housing conditions require of people was endless; whereas, real estate was directly and closely relate to plant and work condition's ameliorate, correlating with enterprise development. On account of territorial finiteness, persons are in existence very optimistic anticipation to real estate prices jump. While economic development got off to rose time, real estate demanded flush, and it made land resources, in particular land resources supply, was very finitude in down town, thereof it resulted in real estate anticipation rise in price, disagreeing with , , ( ) , 1155 practical situation of market, and made much non-real estate enterprise and private investor put much money into real estate, in the hope of obtaining benefit of price hike, and it accelerated real estate price up. They hardily pledged purchased real estate to bank debit for investment in real estates while everyone observe that real estate price only rose and not drop with hardily withal purchase to. Because real estate was realty and easiness attachment, keeping and realize whereas price only rose and not drop the bank believed such loan risk no room to swing a cat in and sometimes over optimistic estimated pawn value under profit driving and it strengthened financing ability of putting money into real estate of credit giver and ulteriorly aggravated real estate prices' hoisted and industrial outspread. So real estate speculation purpose demand was related to territorial scarcity, that is to say, the purpose of buying storey was only turn regrate , but not live, and if this kind of behavior became upsurge colony action, it was difficult of suppression, real estate froth came into being. It was a kind of specific merchandise and its supply and demand particularity consisted in serious restriction in the real estate. In three primary nutrients(capital, work force and soil) elasticity of supply of soil was least in real estate, supply elasticity was less and demand elasticity was major. Relatively, real estate supply took on major rigidity, and amplitude of variation was finitude and real estate demand has enormous oscillation space and this was principal aspect of determining real estate price. So, in accordance with signification of real estate froth, we could start from requirement factor of real estate price, and analyzed real estate price formation in terms of real estate speculation price mechanism . In terms of this clue real estate price value was composed of two parts (1) real estate use value was earnings rate ,from which real estate owner acquired in use, namely real estate "standard price". To the house type, real estate use value was satisfaction and enjoy acquired from using and consuming house to the commerciality type, it was equivalence hire that did not contain anticipated price change in use. Under this condition, anticipate number of capital gains both were zero. (2) present value of real estate assets anticipate capital gains, was fluctuate amount of capital gains ,induced by anticipation price change , namely real estate "speculation price". The formula is: , , , , , , , ; , , , ( , , ) , , : , ; Pt = Pt 0 + Pt m = Pt 0 + Pt m+1 / (1 + it ) (1) , P is the price of real estate in t period; P is use value of real estate; P is present value of expected capital gains of real estate; P is expected capital gains of real estate in next period; i is interest rate of real estate in t period。 In the formula 0 t m t t m t +1 t 0 Real estate "standard price" Pt in equation (1) is real estate price when expected capital gains is zero. It is reputed that it is relative to income per capita y, loan rate I, scale of urban population Φ. The relation of real estate price and per capita income was positively correlated, when denizen per capita income was higher, denizen disposable personal income was more and real purchasing power was more powerful. The influential factor of real estate price was per capita DI, on account of equidirectional and synchronous between per capita income and it, even them hardly in accuracy told difficult of them so we could replace it with per capita income .while per capita income increased the life level should came along and his live and active spatial require also improved at finally, then real estate price soared. As a whole, real estate price assumed negative correlation relation to lending rate, it took effect to "standard price" and present value of anticipate capital gains. While loan rate went up, on the one hand, people would increase mortgage loan outgoings and cut DI, so reduced real estate consumptive on the other hand people also depressed the anticipation that real estate went up and decreased real estate invest appetite. these both led to real estate lower price. Real estate price assumed positively correlated positively correlated relation to urban population scale φ. on the one hand, urban population scale was larger, and its diffusibility impact more broadly, and gather degree of culture, finance, politics and imperial box and pin deliver establishment etc was higher. this kind of gather created treasure, only it behave as convenience of substance and mental life, but not folk , , , , , , , 1156 ; income. this was valuable, just as it would like to remove to flourishing point, bidding a high price, for communication more convenience and life more convenient. Population gather made real estate price level improve. on the other hand while urban scale enlarged, by reason of confinement of land area, population density certainty increased. it induced such as building higher, and communication multilayer development etc. these made crowd cost and brought real estate unit construction cost increase and price improve. , , , Therefore,"standard price " of real estate P = f (y , i , Φ ) (2) Pt 0 can expressed as: 0 t 1 t t t m Expected capital gains of real estate in next period in equation (1) Pt +1 is the speculative price of real estate. According to taking a profiteering attitude of positive feedback mechanism of investors of real estate it is reputed that the price is relative to the growth rate of real estate price in previous period. , : m Therefore, speculative price of real estate Pt +1 can be expressed as m t +1 P = f 2 (g t ) (3) , Substituting equation (2) and (3) into (1) composing model of speculative price of real estate can be expressed as: Pt = f1 ( y t , it , Φ t ) + f 2 ( g t ) / (1 + it ) 4 : () III Determination method of froth degree of real estate has two steps:first is to establish computation model of "standard price " of real estate and confirm "standard price " of real estate. second is to confirm the froth degree of real estate. 、 1 To establish computation model of "standard price " of real estate and confirm "standard price " of real estate. According to equation 4 we can found approximately linear equation as follows: Pt = a 0 + a1 yt + a 2 it + a3 Φ t + a 4 g t / (1 + it ) + u t 5 () , Here "standard price" of real estate is () : (6) Pt = f 1 ( y t , it , Φ t ) = a 0 + a1 y t + a 2 it + a 3 Φ t 0 Speculation price of real estate is: (7) In the previous three equations; Pt m = a 4 g t / (1 + it ) Pt -- the price of real estate upper in t period; ; yt -- per capita income of the region in t period it -- rate of short term loan in t period ; Φ t -- the scale of population of the region in t period; g t -- real growth rate of price of real estate in t period u t -- random error. ; Substitute the several series data of price of real estate , income per capita, rate of short term loan, scale of population, real growth rate of price of real estate into equation (5). proceeding linear regression analysis, found out the numeric of 5 parameters: a0 a1 a 2 a3 a4 .then substituting relate parameter values and explanatory variable into equation(6), we can get the standard price of real 、、 、、 1157 0 estate Pt . 、 () 2 Acceptance and rejection criteria froth degree of real estate K froth degree of real estate is a Relative conception to "standard price" of real estate. definition is the ratio of the difference between real price and standard price of real estate and standard price of real estate. As follows: ( ) K = Pt − Pt 0 / Pt 0 × 100 100 Economic froth of real estate has both advantageous and disadvantageous. Moderate economic froth is beneficial for flourishing economy, promoting competition, impulse development of real estate and increasing of national economy. Such as: tiny raising of price of land; Steadily raising of room charge, Development investment of real estate higher than growth rate of society capital investment; supply of commercial house slightly exceeding market requirement etc. But we must soberly recognize that real estate price has the tend that exists more froth during socioeconomic developing time. If froth degree was oversize it is harmful that causing borrowed boom. The key is controlling it in a moderate range avoiding drastic fluctuation. Hereof gave out the following acceptance and rejection criteria of froth degree of real estate If K 0 illustrates that forth exists in real estate market if K 0 illustrates that deflation exist in real estate market if K= 0 illustrates that market condition of real estate is ideal. When K 0 according to the value of froth degree of real estate. We can divide real estate market into four situations: safety area, warning area, dangerous area, grievous dangerous area. If K 0 10 real estate market is in safety area; If K 11 20 real estate market is in warning area If K 21 30 real estate market is in dangerous area If K 30 real estate market is in grievous dangerous area. , : ⑴ >, ; , ⑵ >, =( ~ ﹪), =( ﹪~ ﹪), =( ﹪~ ﹪), > ﹪, ; <, ; ; IV The explanation of problematical relative to requirement factor model method 、 , , 1 real estate value took on exceptional characteristic by reason of representative regional market so it has not practice sense to ascertain real estate froth degree all over the country. So we must according to the region and the real estate style that is to say different city live or trade type real estate etc, we respectively measured and analyzed for in accuracy ascertain real estate froth degree. On the basis of the above measurement result it was completeness possibility that in some floor price supreme or anticipate floor price amplification maximal, real estate froth was not most serious and it was also completeness possibility in some cities real estate froth was structural nothing but distinctness occurred in top grade house and commerciality real estate. 2 real estate froth degree was average one in ad hoc expeditionary city and in given period, on the base of requirement factor model method. It was fit with average real estate froth, by reason of it was durative rose course in a given period. 5 parameters need be ascertained in the method in general, it need 10 time-interval real estate data. If we choused month as time-interval unit, and proceed regression analysis, using relevant data from January to December in certain city in certain year, we can get real estate froth degree here; if we choused season as time-interval unit, and proceed regression analysis using relevant data of real estate in 10 12 seasons from BOY in certain city, we can get real estate froth degree of these time-interval this city. At last, because of lacking of history and latest data relative to every municipal real estate, empirical research cannot carry out, and cannot indicate real estate froth generate condition on the base of aforesaid requirement factor model all over the country, and these will just be pursuit in future. , , , , , 、 , , ~ Main References: 1158 、 、 、 、 、 、 1 Kang Airong Market economy healthy development moral soul - integrity mechanism Economic Forum .2004.13 2 Du Lanzhu Discusses the establishment and improvement of the system that to protect integrity of the accountant. Economic Forum .2004.12 3 Zhang Yueqing The government has to pay great effort to make up for malfunction of the real estate market caused by monopoly focus of the real estate net 5 May 2006 4 National Development and Reform Commission: the land may not be the highest bidders in the future South of Yangzi River Times 29 August 2005 5 Lijin Cui Debate of the Model of Real Estate Development: Removed Land Price from House Price Economical Reference Newspaper, 11 April 2006 6 Du Meng. Original Sin of the Real Estate Market Urban development, March 2004 About the author: Wang Hong, female, born in May 1972, Associate Professor, Master of Northeast University of Finance and Economics, working in engineering management department of Pingdingshan Institute of Technology and mainly engaged in construction and real estate Economic Research. 1159