Abstract

This research uses 2002-2013 Chinese data to analyze the Chinese real estate market. We look at the returns on direct real estate, securitized real estate, and the general stock market. We compare the financial health of the real estate industry to the financial health of other industries. We do not document an overheating real estate industry, even though the real estate industry does have a higher debt to asset ratio compared with other industries. The monthly return is above 1% for all three types of investments (direct real estate, securitized real estate, and the general stock market). The Chinese economy does grow at a shocking pace. This is not limited to one industry. If there is overheating, we believe it relates to the Chinese economy as a whole.

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