Germany's Experience and the Reform Direction of China's Housing Market

Following the outbreak of the U.S. subprime mortgage crisis in 2007 and a worldwide financial and economic crisis triggered afterwards, major developed western countries have been suffering from a loss heavier than ever. Nevertheless, Germany was exposed to a comparatively minor impact and has recovered rather quickly, for which the reason should be that the house prices in the U.S. and major developed European countries had undergone a constant rise for up to a decade starting from the late 1990s. On the contrary, Germany had been maintaining a long-term stable tendency. This paper compares the house prices between the U.S., the Euro zone and Germany, and analyzes the relationship between their long-term interest rates and GDP growth rates, so as to reveal the impact mechanism of house price fluctuations on financial crisis, and to predict the reform direction of the Chinese housing market by synthesizing Germany's experience in this regard.