Price Method And The Decision Mechanism Of The Shanghai Housing Price Study

Since the real estate industry completed marketization reform in 1998, Chinese households can buy houses following their own preferences and housing developers have the innovation to produce housing commodity. Housing Industry has developed quickly and become major industry in GDP recent years in Shanghai. At the same time, the issue of "Housing price" and "Location Choice" turns into the main topic of government and the people. From housing data, we find that the housing prices in cities have great difference: the highest has even ten times of the lowest price. We must research and give the answer to such questions: What drives housing price? What determine housing price? What's the reason for the Shanghai's residential housing price increase by the supply and demand factor? It is the aim of my paper.Urban Economics theory gives the answer why housing prices have great difference in the view of theory, but which focus is explaining the origin and development of the city. Hedonic Price Method is the main instrument to empirically study the determination of housing price in the world and have been used in many regions by the government and the enterprise. Since the sixties of the 20^th century, the hedonic price theory and model has been widely adopted to study the real estates market abroad, and foreign scholars have carried out a large amount of experiential research. Up to now, because the setting-up of the hedonic price model needs to collect a large amount of data and carry on the extensive investigation, few researcher process experiential research to study the auantitative relation between the housing characteristic and housing price at home. The house transaction must put on records in the Shanghai's Housing Trading Center since July 1, 2004, which gives the data for this paper's study. This paper devides the literature about housing price's determination into the macro-view of urban economics and micro-view of hedonic price method.This paper studies the development of Shanghai Residential Housing Market after 1993, which experienced four stages, low degree of marketization (1994-1997), transition period after complete marketization reform (1998-1999), booming market and rocketing housing price (2000-2005.5), price drop and recovery (2005.5-present). This paper reviews characteristics of each stage and reaches conclusion that the process goes with the gradual increase of housing commodity attributes and marketization degree.From the research, this paper finds that the locational difference/ original environment difference and the public investment's spatial difference cause the difference of land prices' difference under the competition of land developer, also cause the difference of urban housing prices under the competition of urban residenters. Urban public investment makes a great role in the development of Shanghai's housing industry. The residential preference has great diversity in the housing submarket: "Inner Ring" and "Outer Ring". This paper also concludes that urban housing prices in the Yangtze River Delta are primarily determined by demand-side factors. The growth in the per Capita disposable income (or total income) of urban households and non-agriculture population proportion ratio are the major driving forces of demand for urban housings.At last, this paper just gives the way for studing the housing prices' difference in city. We shouldn't pay attention to real number for the housing attribute's contribution but the positive or negative attribute.