The Empirical Study On The Influence Of Regional Economic To China Real Estate Development

Real estate industry is a import part of Chinese economy. After dozens of years, it becomes one of the most import industry of China., besides it drives forward other industries. However, within these achievements, it still exits controversies. Resent years, the development speed of real estate industry attracts major attention of government. Since 2002 many policies has published to standardize the market, but hardly effects. During 2003 and 2005, average selling price of commercial buildings has raised 17.76%,come up to 3000 Yuan per squre. These figures provoke full attention throughout the country.What is the path of real estate affects economy, which policy is the most effective, boom of real estate weather will take influence to consumption of people? This paper will answer the question by constructing a model with gross regional product, total investment in fixed assets in the whole country and consumption.First, this paper starts from basic economic theory, analyzing bubble theory of real estate, then comparing with former cases in history, studying variables of bubble economy to achieve a conclusion, that is there's on bubble in China. Second, with a host of figures, this paper illustrates process of Chinese real estate development, furthermore, it analyses affectivity of macro-policy, and interprets some problems in Chinese real estate market, then gives several possibilities. At last, it analyses investment theory and consumption theory, and deductive reasoning a proper model for Chinese real estate. Particularly, it introduces liquidity constraints hypothesis into consumption theory, and demonstrates that Chinese real estate is accord with life cycle model. Then, it analyses variables and parameters, achieving a conclusion that there's outstanding correlations between Chinese real estate and Chinese economy, and interest rate has outstanding correlations with total investment in fixed assets in the whole country, but domestic loans has little effects with interest rate, and then extend to the affectivity of money policy. In consumption field, it construct an approximate model to illustrate the rising price of real estate will not restrain expenditure of households. After these ,this paper puts forward policy proposal to real estate industry.