The Residential Price Of Multi-factor Dynamic Analysis

House is where residents live and enjoy their daily life,and it is their mostvaluable and important wealth as well,so the fluctuations in housing pricesdirectly affect the welfare of residents.At the same time,the real estateindustry has become one of the pillar industries in China's economy since theaccomplishment of reform of the housing allocation system.Within the industry,residential house development market is an important place for operation,andhousing prices plays a critical role in the real estate industry and nationaleconomic development.Therefore,fluctuations in housing prices play animportant role for the people's livelihood and economic development in China.The most important thing in the analysis of fluctuations in housing prices is todefine the factors that affect housing prices,and based on the analysis ofthese factors,test the dynamic relationship among housing prices and theiraffecting factors,and predict and understand the pattern of fluctuations inhousing prices.This paper attempts to carry out a dynamic analysis of avariety of factors that influence the fluctuation in housing prices,and analysethe causes and trends of fluctuation in housing prices.By using the data of relevant indicators based on monthly frequency from2005 to 2008,the paper prospected to analyse the general price of housingimpacted by the macroeconomic factors and the hedonic prices impacted bythe microeconomic factors,and based on cointegration analysis of multipleregression equations and Granger causality test,the paper verified therelationship between housing prices fluctuation and its macro and microfactors and the mechanism.The paper is divided into seven parts.The first chapter introduced theresearch background,the significance of the study,research questions andmethodology.The second part is a literature review,which reviewed mainliteratures that research the impact on housing prices and their relevant factorsfrom domestic and foreign researchers.Based on the characteristics of house,this paper classified the impact factors into two categories that one treatedhouses as residential consumer goods and the other treated houses asinvestment goods.The consumer factors include macro-factors which are thesupply factors (such as land prices),factors such as population and income represented the demand factors,economic growth standing formacroeconomic factors,as well as micro-factors which is characteristics ofhouse.The analysis combined with the related models considering demandand supply and hedonic price model.The other view,which regards houses asinvestment instruments,analyses the house prices both from internal andexternal monetary factors impacted housing prices fluctuation by adopting thebubble model.The third part of the paper explained and concluded the continuousdevelopment and progress of Hangzhou real estate market since the China'sreform and opening up.The paper illuminated that housing allocation systemreform is the establishment of the housing market.The paper also explainedand analyse the characteristics of housing prices fluctuation in the variousstages of Hangzhou real estate market development from the housingallocation system reform.The impact that subprime financial crisis placed onthe housing price fluctuations in Hangzhou was also analysed.In chapter four,the paper formulated a price index model with theapplication of hedonic price theory,and the model has been empiricallyanalysed by randomly selecting 500 sets of actual transaction data inHangzhou.Based on the result of the empirical analysis,the paper calculatedthe hedonic housing price index by adding the monthly data from 2005 to 2008.Meanwhile,by excluding the impact from the characteristics of house,housingprices was purely impacted by market supply and demand and by the changesin investment demand.In this paper,the fifth and sixth parts were organised on the consumergoods perspective and investment perspective respectively.From theconsumer goods perspective,housing prices were impacted by the economicdevelopment,land supply and housing supply in the supply side,as well asdemographic changes and income levels of residents in the demand side.Thestudy found that fluctuations in housing prices basically follow the equivalenceof supply and demand,but a positive correlation between the volume ofhousing supply and housing prices is an abnormal phenomenon.The paperconsidered the situation primarily due to demand for residential investmentand lead to the volume of houses and housing prices rose at the same time.From an investment point of view,the housing prices were mainly impacted by monetary factors,such as interest rates,money supply,exchangerates and international capital flow.Based on the result of empirical analysis,the paper found that a positive correlation between housing prices and thevolatility of real interest rates,which also explain the situation of excess marketliquidity.It concluded that investment and speculative intention led to thefluctuations in housing prices.As an open economy,the paper found that theexchange rate and the inflow of'hot money'is the cause of fluctuation inhousing prices,while housing prices is not the reason for exchange rate andthe the inflow of'hot money'.Finally,the conclusion and future research are discussed.