The Relationship between Real Estate Bubble and Financial Crisis Taking Shanghai as an Example

Abstract

In recent years, the real estate market has become increasingly hot, developing very quickly, and has become one of the important industries to promote the development of GDP in China. However, the rapid development of many negative effects, such as high prices and rising costs of living, has caused the real estate market to bubble, causing people to worry about whether it will cause a financial crisis, resulting in an economic crash. As a result, many scholars have conducted various studies on the real estate bubble, but they have not reached a consensus on the bubble. Economic crashes caused by real estate bubbles have occurred on occasion throughout history, and many financial crises are triggered by excessive real estate bubbles. This paper visually analyzes the development of the real estate market in Shanghai in recent years using a literature review method, analyzes the transmission relationship between the real estate bubble and the financial crisis, expounds on the harm caused by the bursting of the real estate bubble, and proposes corresponding countermeasures for the benign development of the real estate market.