Chen, Dong2013-01-282012https://hdl.handle.net/10182/5212The dramatic increase in China’s house prices creates house prices bubble spurring the Chinese economy (Derger & Zhang, 2010). From the U.S. sub-prime loan crisis, however, it is evidenced how severely the fluctuation of house prices can potentially endanger the stability of the real economy, especially for a large housing market such as the US, the European Zone and China. Following the burst of the US house price bubble, the global financial market has been extremely volatile in terms of the debt issues in both the US and countries in the Europe Zone such as Greece, Italy, Portugal and Ireland. Similarly, it is impossible for China to dodge the impact of the global financial and economic crisis because China is over-dependent on exports to stimulate its economic growth. Beijing, the capital city of China, is the biggest city of China in terms of both population and land area; it has the largest commercial housing market. This study investigates whether a house price bubble exists in Beijing housing market in the period from 1999 to 2009. This study examines the efficiency of Beijing housing market and provides appropriate risk management techniques to manage housing bubble crisis in Beijing. In this study, income, inflation, interest rate and construction cost have been using to model the Beijing house price dynamics; the result suggests a house price bubble exists in Beijing housing market.enhouse price bubbleriskhousing loanChinaThesisQ112889249