| Housing is the main components of a national wealth and property of residents in a country, it is an important consuming goods, is also an important asset. In the modern economy, with the constant expanding of the size of the housing stock, Housing price volatility has an important impact on the macro-economy and balance. Since reform and opening-up, China's economy has been keeping sustained and rapid growth, the real estate industry in China is having been developed more rapidly, has been developed into a pillar industry of national economy. In recent years, the most important problem in China's housing market is fast rising housing prices, the high and sustained rise of housing price level has extensive and profound negative impact on the operation and development of the national economy. We can see that housing price is not only their own problems of the housing market, and has also become the major issues about a sustained and healthy development of national economy and macro-control.In the basic structure of this report, it is divided into six parts:Section 1, The Summary and Review of Domestic and Foreign Literature. From the aspects of eight, for example, the evolution of housing basic theory, housing demand and housing prices, speculative demand and price bubble theory, etc. this report review foreign literature in theory; from these aspects, such as,the progress of theoretical research, demand for house and housing price, the impact of housing price on the national economy, the analysis of formation mechanism of housing price and control, the domestic literature is reviewed in theory. This article point out that as the foreign real estate has been developed to a mature stage, foreign economists more concerned about the study on the bubble economy and the crisis, meanwhile, lack of the systematic analysis on the impact of housing price fluctuations on the economy when the economy is normal. Although Chinese scholars research related issues about housing price and fluctuations to a certain degree, the housing market in China is still in the initial stages of development, thus, their studies are not comprehensive, not systematic, not an in-depth, lack of the theoretical depth and the full analysis of the evidence.Section 2, The Theoretical Analysis on The Formation of Housing Price and Fluctuations. On the basis of the analysis on the characteristics of housing and the property of Housing demand, This article point out that housing demand is of the dual attributes with consumer demand and investment demand. Through the analysis on the factors of consumer demand for home buyers, This article point out that the increase of the rigid demand is bound to lead to an increase in demand for the expansion of the house, meanwhile, the raising of demand for purchase depends on the increasing of the level of national income. The higher the level of housing prices, the smaller consumer demand for house, but the higher the rate of housing appreciation, instead, demand for house may increase. Government's policy to encourage demand for house, commercial mortgage system will also promote the demand of buyers. History, culture and social environment of a country or region also play a large role in demand for house, by the impact of the traditional concept, the housing demand is more reflected in demand for own housing. Through the theoretical analysis on investment demand for purchase of demand for house, point out that because of speculative demand for housing purchases, there is two-equilibrium phenomena on the demand curve of housing market, When the whole market is dominated by speculative demand, volume and prices will continue to rise, The demand of speculative buyers depend primarily on the non-rational expectations and financial support. With the constant enhancement of investment property of house, capitalization pricing is used to housing pricing, by building the three sub-market model including including consumption, investment and production, this article analyze the endogenous effects of macro-economy factors on the formation of housing price and fluctuation, at the same time, housing prices also fluctuate with exogenous, that is rooted in speculative housing demand of buyers and irrational expecting way. Housing price bubble in the housing market is persistent deviation from the basic value of house, that is entirely supported by speculative demand, the extent of house price bubble can be measured by using the three indicators that is housing price-to-income ratio, housing price-to-rent ratio and housing vacancy rate.Section 3, The characteristics and nature of housing price level and volatility in China. On the basis of analysis of the status quo and the features of the overall national and sub-regional housing price.using price-to-income ratio, housing price-to-rent ratio and housing vacancy rate, by empirical analysis on housing price level in China, This article come to the conclusion that there have been significant house price bubble in the housing market in our country, especially in front-line cities. By the analysis and judgement on nature of our housing market, This article point out that in recent years, particularly in 2007, speculation is rampant in the housing market in our country, especially in some large cities, irrational speculative demand for housing purchase have dominated, housing price bubble is the results of speculation and manipulation.Section 4, The Formation Mechanism Analysis of The Level and Volatility of The Housing Price in China. By the in-depth analysis on formation mechanism and deep-seated reasons of the housing bubble and demand for speculative buyers, this article point out that it is the major reason for formation of the housing bubble and demand for speculative buyers that the expanding of income gap, "herding" led by rapid rise of housing price, excess liquidity and inflowing of international hot money, the expansion of the bank's individual housing loans in recent years, while, the manipulation to market expectations by the interest groups composed of developers, local governments, etc. is the deep-seated reasons. Through monopolies and price manipulation, hoarding of land, reducing the effective supply of house, developers led to speculative demand for house and price bubble ever-expanding, driven by the interests of the local fiscal revenued and GDP growth, local governments control prices by use of the land monopoly, policy guidance, direction of public opinion. This article is also analyze the formation mechanism of stagnant prices and reduced trading volume in housing market since the end of 2007, and point out that it is the the main reasons for stagnant prices and reduced trading volume in housing market that price control policy effects, the market expectation changes, a large number of speculators opt out of the market, the high price limits consumer demand, at the same time, it also is the important reasons for stagnant prices and reduced trading volume in housing market that in the face of the situation of stagnant prices and reduced trading volume, the developers continue to monopolize at high prices, attempt to confront the market.Section 5, The Analysis of the Effects of The Level and Volatility of The Housing Price in China. In the three aspects of consumption effects, the investment effects, as well as the impact of the financial system by the level and volatility of house price, this article makes the theoretical and empirical analysis on the economic effects of the level and volatility of house price in China. By the theoretical and empirical analysis on the impact of housing price level and volatility on consumption, this article point out that there is a down U relationship between house price and consumption, the moderate rise of housing prices could boost consumer spending, meanwhile,the over-rise of housing prices could cause crowding-out effect on consumption , and form a negative impact on GDP, this article point out that the crowding-out effect is the key factor that result in lower consumption rate. By the theoretical and empirical analysis on the effect on the investment of real estate and related industries and other industries real estate by changes of housing price, this article point out that in recent years, rising housing prices have a greater role in the promotion of the investment of real estate and related industries, GDP growth, but, at the same time also point out that housing prices will cause fluctuation in the real estate investment, while,the volatility is bound to lead to sharp fluctuation in the national economy. this article makes analysis on the impact on investment of other industries, China's housing price fluctuations in, point out that through the production costs and the transfer of funds, rising housing price have a crowding-out effect on other industrial investment. On the basis of theoretical analysis, this article makes a empirical analysis on the impact on the financial system by housing price fluctuation in China, this article point out that in recent years, with domestic housing prices are rising, the scale of real estate credit of bank has been expansion, bank-based credit is the major real estate finance in China, over-reliance on bank credit of the real estate industry will bring enormous risks to bank, if housing prices drop, a bank crisis would triggered.Section 6, The Options about The Housing Price Control Policy in China and The Establishment of The Target Area. First of all, this article demonstrates the necessity of the change in control opinion, and the necessity that Central Government continue to implement regulation, as well as, point out that the housing market should service for consumer at this stage in China, housing market should be from investment market back to the market of consumer goods market, for the promotion of consumer demand actively, and inhibiting over-investment in real estate , making the national economy sustained and stable growth, it is required that Central Government continue to implement macro-control to high housing prices. In order to contain the severe speculation in housing market and monopolistic manipulation, this article gives some proposals that the policies of interest rate, credit, and real estate tax should be adjusted, the foreign speculation should be hit forcefully, as well as the information disclosure should be standardizd. this article demonstrates the necessity about setting the price control target area of housing price, point out that the pre-control of housing price is favourable to squeeze out bubble in time, and conducive to achieving a soft landing. In order to avoid the negative impact on national economy by price fluctuations, for the realization of the effectiveness of control, the setting of control target area should be based on the economy effects. In theory, this article demonstrates the determination of the control target areas based on economy growth effects, and proposes that in order to ensure normal household consumption level, the ceiling of housing price should be housing price to ensure normal household consumption level that is determined by the bearing capacity of formed by a certain percentage of disposable income of residents, the ceiling of growth rate of housing price should be the growth rate of disposable income, the growth rate of house price ceiling for the growth rate of disposable income;the determination of the lower limit of price fluctuations need to consider the influence to the security of the banking system by price down. Finally, this article carry out preliminary study on the determination of the control target areas of housing price in China, by using housing valuation models based on economy growth effects, carry out the determination of the target area.
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