The Fluctuation Characteristics And Factors Of Real Estate Price In China

Since the housing reform from 1998, China's real estate market has experienced rapiddevelopment, which has made outstanding contributions to stimulate economic growth andimprove people's living standards. However, during the development process ,China's real estatemarket has exposed a series of questions , not only being harmful for the healthy and stabledevelopment of China's macro-economic, but also may having a negative impact on the society'sstability and harmony as a whole. Therefore, China's real estate market, especially the price issuehas been the focus of the community, and also been an important research subject which manyscholars have committed to.Since the U.S.subprime mortgage crisis in 2007, China's real estate industry not onlymaintains rapid and stable growth, but also actively adopted various measures to address thisglobal financial crisis. For example, the depth reform of China's real estate has been mentionedon the agenda, the government has gradually strengthened the regulation of China's real estatemarket, and the central bank has gradually raised bank lending rates to reduce the speculativeloans for buying a house, and implemented a series of policies such as increasing restrictions onthe payment percentage of the first set and the second set and so on. On one hand, theseinitiatives reflect that the regulation of China's real estate market has gradually been deepen anddiversified, on the other hand, it reflects China's real estate market is imperfect, which existsmany and complex problems. That's to say, it increases the difficulty of macro-control and higherregulatory requirements for its effect objectively. Therefore, researching the characteristics ofChina's real estate price movements, exploring the major factors of price changes will not onlyhelp to further understanding of China's real estate and the rule of the whole macro-economicstructure, but also put great significance on improving the effect of our macroeconomic policies on real estate's market regulation, maintaining the healthy and stable development of China's realestate market, and accelerating the socialist modernization.In order to study the characteristics of the real estate market price fluctuations and theirimpact factors, this paper reviews the relevant literature firstly. Based on the existing research,combined with the actual situation of China's real estate industry, and through a variety ofeconometric models and time series methods ,such as Markov Regime Switch model, spectrumanalysis, error correction model, VAR, panel data models and discrete choice models, it hasfocused on the changes of characteristics , the main factors of real estate prices and the monetarypolicy effects on the regulation of real estate prices, which hopes to be a useful complement tothe existing research, and provides a useful empirical basis and policy recommendations for thereform and development of China's real estate market.In Chapter 3 and Chapter 4, with the use of district system Markov models and spectralanalysis, China's real estate prices'features such as its cycle and non-symmetry have been testedand analyzed. It has found that in recent years, during China's real estate price movements, thereare three kinds of cycle: 7.4 quarters and 13.3 quarters respectively, and the contraction phase ismuch faster than the expansion phase; compared with cyclical fluctuations in GDP growth, houseprice index is with the characteristics of two quarters lag. From the perspective of frequencydomain sequence, it can be seen that there are high correlation and co-mobility between the priceof real estate cycles and macroeconomic cycles.In chapter 5, based on the cointegration theory and eror correction model, this paperanalyses the long-term and short-term factors of Japan and China's real estate prices. It showsthat: in the long term, there is a stable equilibrium among our country's house prices, averageincome and construction costs. That is to say that the factors from both demand side and supplyside influence the change of house prices. The income elasticity of is 0.58 and the constructioncost elasticity is 0.55. In contrast, the income elasticity of Japan's house prices is higher thanChina's house prices. In the short term, one-period lag series of house price fluctuation, realgrowth of family income and wealth have different influence on China's and Japan's house prices. In addition, the fluctuation of China's house prices is higher than Japan's house prices.Therefore, it is strongly suggested that we should pay more attention to the short-term fluctuationrisk in the process of regulating and controlling China's real estate market.In chapter 6, based on China's monetary policy, this paper has made a series of analysis andevaluation on the regulation effects of the real estate market. Firstly, with the impulse response toverify the central bank's response (the implementation of tight monetary policy) to the real estatemarket raising prices. But both from monetary policy's response to the real estate market andmonetary policy's effect to the real estate market regulation, there is a certain lag. Secondly, withthe use of panel data models, the effects of China's monetary policy on the regulation of regionalreal estate market have been compared, and the results show that the level of disposable incomeand monetary policy are the main factors affecting real estate prices, both being the samedirection and significant. In contrast, although the number of local population reflects the needsof the real estate market, its effect on the real estate prices is not significant. In addition, thecommercial real estate area of this year as a single of the real estate market supply, its impact onthe real estate is not stable, because our residents to purchase real estate consider more of theirown capacity, rather than the market supply and demand conditions. Finally, the regulationeffects of money supply between financial institutions'growth rate of loans have been compared.The results show that tightened monetary policy can effectively inhibit the rising real estateprices, but the effects of different policy instruments on the real estate market have showedsignificant differences, in particular, the adjustment of financial institutions'loans compared withmoney supply, can impact residents'housing demands directly, and play a better control role.Finally, this paper have made a review and evaluation based on practices of China's realestate market policy regulation, and have analyzed the regulation of real estate market based onfiscal policy and monetary policy, also providing some policy recommendations on real estatemarket regulation. While in recent years,, the regulation of China's real estate market is not verysatisfied, the monetary and fiscal policies ,as China's main economic macro-control measures,have played a crucial role on the regulation of China's real estate market, continuing to create a favorable economic environment for the sustained and healthy development of China's realestate.Although this paper only examines the main economic factors impacting real estate prices,not discussed other issues such as social factors, the results obtained from this paper will help tohave a better understanding of the change characteristics and impact factors of China's real estatemarket, and also has an important reference for a correct understanding of China's real estatemarket operation rules, and to improve macro-control effects of the real estate market andpromote the healthy and stable development of the real estate market...