Discussion on the Key Factors of Real Estate Bubble Formation in The Process of Urbanization

Abstract

With the acceleration of global urbanization, the real estate market plays a vital role in urban development. However, the emergence of real estate bubble has become a global problem, which poses a serious threat to economic and social stability. The purpose of this study is to explore the key factors of real estate bubble formation in the process of urbanization, so as to reveal its complex mechanism and influence. It is found that financial factors are one of the main driving forces for the formation of the real estate bubble. Low interest rate policy, loose monetary policy and easy access to credit conditions have stimulated investors' funds to flow into the real estate market, which has led to unreasonable price increases. The relationship between supply and demand also played an important role in the process of bubble formation. In addition, speculation has also played a key role in the real estate market. Investors usually pursue quick profits, but the volatility of the real estate market attracts speculative investment and promotes the unreasonable rise of housing prices. The government's land policy, planning restrictions and development control also have a direct impact on the market, and government policies and measures can affect land supply and real estate market prices. Generally speaking, the formation of real estate bubble in the process of urbanization is a complex phenomenon of multi-factor interaction, and its mechanism involves finance, supply and demand, speculation, policy and external factors. This study is expected to provide powerful theoretical basis and policy suggestions for decision makers to deal with the real estate bubble in the process of urbanization.