Modeling speculation in Shanghai real estate market

In this paper, the main purpose is to penetrate the abnormally sustaining house price growth, or so-called price bubble in Shanghai real estate market through system dynamic methodology, which especially focuses on the systems with highly dynamic characteristics, and complicated feedbacks relationships involved, which is consistent with the system of real estate market. The present paper mainly simulates the scenario of speculation that causes the problem of unsuitable high price in Shanghai house market and to see what kind of impact both on the social and economic realm will be after the trend of speculation is quenched. The present model divides the system into 6 parts, population and economy sector, family house demand sector, speculators' demand sector, speculators' profitability sector, house price sector, and house construction and sale sector, to analyze how these subsystem can directly or indirectly work on the whole real estate market in Shanghai.