Real Estate Bubble and Financial Risk: Challenges and Countermeasures in China

As an important pillar industry of the national economy, the development of real estate is closely linked to the financial system. In recent years, the volatility of the real estate market has attracted widespread attention, and the impact of the real estate bubble on the financial market has become an important research topic. A series of negative impacts due to the bursting of the real estate bubble in 2008 was also one of the factors that led to the global financial crisis. The formation of a real estate bubble can lead to an increase in financial risk. Factors such as loose monetary policy, limited investment channels, population growth and urbanization, as well as speculation can trigger a real estate bubble, and the bursting of a real estate bubble can lead to increased credit risk, rising financial system risk, and negative impacts on economic growth and social stability. The purpose of this paper is to conduct an in-depth study of the risks that real estate bubbles pose to China's financial market and to assess China's existing preventive strategies. By analyzing the relationship between real estate bubbles and financial risks, it provides decision-making references for the government, financial institutions and investors, in order to promote the healthy development of the real estate market and the stability of the financial system.