The inverted U-shaped curve effect in the development of real estate industry

After making abundant statistical analyses on the economic growth rate of each country, American economist, Simon Kuanets educed that the development level of real estate industry showed a highly positive correlation with the growth rate of national economy. As a basic industry, the real estate industry is long term or permanent and absolute; whereas as a pillar industry, it is relative, and only exists in the period from a country's economic take-off to its economic growth into maturity. After passing through a period of fast growth, the national economy will enter a steady and sustaining development period, and among the factors affecting the supernormal development of real estate industry, some may continue functioning as before, e.g. urbanization, and some others may not function as before, e.g. old city reconstruction. After passing the point of inflection, as a whole, the force of function will decrease to nearly vanishing and enter a normal development; and the position of real estate industry as a pillar industry will also gradually go down or fade away, and continue to function as a basic industry. The development of real estate industry appears as an inverted U-shaped curve. This thesis will make a particular analysis on the real estate industry of Beijing as a pillar industry.