Effect Of Expectation On Commercial Housing Price: Model And Simulation Based On Expectation Theories

Housing related to people's basic well-being, it is the basement of all economical activities. In recent years, the commercial house price has been booming, made a great impact on the most of consumers'psychology. With the rigid demands, the housing demand was motivating by the expectation of higher housing prices in the future, lead to irrational business acts. Group psychology made people to take cognitive dissonance and to pay the price without rational. Furthermore, this status influenced the supply and demand of market under the self-reinforcing psychological effect, and impacted on the house price.This article analyzed the most important factors about housing market, which was follow those aspects:rigid demand, land supply, investment demand and urbanization. After that, it discussed the reasons and rationality of rigid and investment demands, how they translated into true demands and their effect on the housing market. Then, this article analyzed the consumers'irrational psychology and conducts, based on the expectation of our housing market, and study on the relationship between expectation psychology and house price. Finally, take Wuhan city as a example, this paper established a housing price regulation model base on financial credit, price of land, and consumer price index, beside the factors above mentioned, there are other factors, which maybe not rational, just as previous house price. Both of aspects made the model more prefect to explain the really situation.The model of the commercial house price in Wuhan city is simulated with Eviews to verify the model and the above analysis. The result showed that the adaptive expectation was dominated in the price. Consumer decided the price of commercial house based on the previous price, especially the range of price grown up or down, and the time it continued. We can drawn the conclude that our housing market was a irrational market, so the price was very fluctuate, and divorced form real value. Then, the consumers focused on the prevention of inflation and pursuit capital profits made the investment demand brisk in the housing market, and it did more favor to raise the house price than financial credit or land price.As a management of macroeconomic', the government must take the responsibility of maintaining the stability and continuity of policies, regulating the structure of house, consummating the social security system, and improving the credibility of government. By rationally leading consumers'expectation to keep the price of housing market more stable.