Alert to the Potential Crisis in the Real Estate Environment: Learn from International Lessons and Find a Way out

Abstract

In the early years after New China's creation, China's real estate industry was far from being on a large scale, and the planned economic system restricted the development of real estate enterprises. It was not until after 1978 that, along with the development and deepening of the reform and opening-up policy, the level of urbanisation in China gradually increased and the rise in the standard of living of the people also stimulated the enthusiasm of the residents to purchase homes, making the real estate industry expand at a rapid pace. The value added of China's real estate industry and its contribution to the economy have been on a steady rise, with significant growth and an increasing proportion. The real estate sector has become an integral part of the tertiary industry. However, there have been several obstacles to China's real estate industry's growth, as evidenced by the financial crisis in 2008 and the impact of the new crown epidemic on China. This paper analyseS the impact of the real estate industry on the whole economy during the recession and the potential crisis in China through the economic crises in the US and Japan. Through analysis, it can conclude that a rapid fall in house prices before the economy has fully recovered under the impact of the epidemic could be a major potential crisis for the country. Recommendation: Be wary of the trap of high and low property price differentials and adhere to the policy of no speculation in house prices.