The Relationship Between Real Estate Bubble Premium, Insufficient Household Consumption, Excessive Corporate Investment, and Bank Non - Performing Loans
Xu Jing

Beijing Wuzi University，Beijing，100000；

Abstract: Since the housing marketization reform in 1998, China's real estate market has boomed and become a key driver of economic growth. Yet, post-2010, housing price hikes in some cities have outpaced residents' income and rental returns, manifesting obvious bubble traits. This real estate bubble premium poses threats to the market's stability and impacts the macro - economic structure via industrial chain transmission. Concurrently, household consumption remains insufficient, some industries grapple with excessive investment and overcapacity, and real estate - related bank loans carry potential risks.This paper delves into the connection mechanism between the real estate bubble premium and economic structural imbalances. Theoretically, it integrates bubble premium theory with China's economic structure issues, refining the differentiated impact paths on residents, enterprises, and financial institutions, thus enriching research on the interaction between asset bubbles and the macro - economy. Practically, through empirical analysis and case verification, it offers data support and decision - making references for the government to formulate real estate regulation policies, optimize consumption and investment structures, and prevent financial risks.Existing studies mostly focus on the overall impact of bubbles, with insufficient analysis on the transmission mechanism of the "bubble premium". This paper separates the bubble premium from asset bubbles, systematically explaining its specific effects on consumption, investment, and the financial system, and filling the detailed gap in current research. It defines the real estate bubble premium as the part of real estate prices exceeding reasonable values due to speculation, driven by speculative expectations and having a self - reinforcing feature.The paper also explores how the bubble premium leads to insufficient household consumption through wealth illusion, consumption suppression, and the crowding - out effect of housing purchase expenses.

Key Words: Real Estate Bubble Premium; Household Consumption; Corporate Investment; Non - Performing Loans

References

[1] Wang, S. (2024). A Study on the Impact of Housing Price Changes on Residents' Consumption Structure in Major Cities of China [Master's Thesis]. Jilin University.

[2] Hu, W. Y. (2020). The Impact of Real Estate Bubble on the Investment Behavior of Manufacturing Enterprises [Master's Thesis]. Hebei University of Technology.

[3] Zhang, Y. W. (2017). A Study on the Relationship Between Real Estate Risk Premium and Commercial Banks' Risk Preference [Master's Thesis]. Harbin Institute of Technology.

[4] Dong, Z. Y. (2021). A Study on the Impact Mechanism of China's Real Estate Prices on Residents' Consumption Upgrading [Master's Thesis]. Hebei University of Economics and Business.

[5] Li, C. S. (2021). A Study on the Impact of Real Estate Price Changes on Bank Credit Risk [Master's Thesis]. Beijing University of Chemical Technology.