Study Investment And Consumption Attributes For Housing Price

By estimating the income elasticity of demand for urban housing in China thepaper arrived at the preliminary inference: the higher income elasticity of China'surban housing also means housing investment properties with more than ordinaryconsumption goods. To control housing prices in order to avoid the real estate toomuch prosperity and social resources resulting from improper, the key is todistinguish between housing investment demand and consumer (owner-occupied)requirements. The innovation of this paper is that it gained alternative indirect utilityfunction through algebraic derivation based on consumers' behavior constraints suchas profit maximization and display preferences. Then paper built the model andestimated China's major urban housing consumption demand and investment demand.By contrast with nine sample cities in the United States, the major countries ofthe Organization for Economic Co-operation and Development (OECD), we obtainedhousing Investment and consumption status of the major cities in China. Paper solvedthe problems caused by data which are the purchase of investment in housingpurchases and consumer acquisition difficulties.The quantitative analysis results show that the housing demand for investment inChina's35large and medium-sized cities increased after2006. It deviated from thetarget to meet the residence requirements. Comparison data of OECD countries indifferent years, the proportion of China's urban housing investment demand is not toogreat than some OECD countries. China's urban housing investment demand ratio istoo large Than the U.S. average.Housing risk premium of investment property (capital gains) and consumerproperties (rental rate) decomposition showed that China's rising investment demandin2006, while capital gains accounted for a higher proportion of housing riskpremium seem to suggest that high housing prices investment properties.Event study shows that the housing control policy of the Government to changethe interest rate is "pro-cyclical", namely: government adjusted interest rates toanti-up, the market went up, the Government wanted prevented cold down, the marketwent down. This phenomenon is an important manifestation of the housinginvestment properties. World Cup, Olympic Games, major sports events held in the city or country analysis found that major sports events cumulative average abnormalreturns on housing are more likely to produce a positive trend.Part of the housing premium as an investment property can be explained fromthe anti-inflation and loan convenience.Policy to avoid pegged regulate housing prices or index. Investment property inhousing should be properly concerned and start control housing investment demand.The Government should establish an efficient and reasonable investment market, toprovide security and various investment products for ordinary consumers. In order toavoid the lack of a safe investment options and investment products leading to stronginvestment demand in housing. The Government should make the appropriateadjustments in housing transactions, housing loans, housing maintain, etc., includingthe design of taxation in order to control the demand for investment.