Research on degree of bubbles and fundamental value of real estate in China and Hong Kong

Abstract

In order to study degree of real estate bubbles of China, we proposed a model of fundamental value of real estate based on partial equilibrium analysis and law of average profit rate. We made up for some imperfections of ZhiGang Yuan's model, and then empirically studied the degree of real estate bubbles of China and Hong Kong. We find that the current degree of real estate bubbles of China is not high compared to that of Hong Kong in the period of its real estate peak time, and is not rapidly expanding. The degree of real estate bubbles is generally low in inland of China, and is relatively high in some coastal areas. © 2011 Springer-Verlag Berlin Heidelberg.