The Empirical Study Of The Relationship Between Lending Rates And Real Estate Prices In China

Since 1998, the rapid development after the real estate industry has become a pillar industry in China. It has tremendous economic traction. At the same time, it is also a leader in economic development of the industry on economic growth, there is a substantial role in promoting. Interest rate is a market economy, one of the basic variable is the main monetary policy. Interest rate policy of the Central Bank monetary policy is the most common, the most important tools, as the price of borrowing money is the important regulating the economy and an important means of leverage to a large extent on the extent of the impact of a market economy. In different market conditions, interest rates and direction to varying degrees of adjustment will meet the different economic objectives. Interest rate reflecting the financial markets as a barometer of the situation, it is the core of the financial market mechanism, the central government to implement macro-economic policies the most powerful way. The face of the overheated real estate market conditions, the price of the real estate market continues to rise, interest-rate policy as an important means of currency regulation and control, there is no doubt the Government has become the real estate market an important means of control. At the micro level, the interest rate is a direct reflection of the credit relationship between the use of funds in the cost of the debtor and the creditors have the right to sell the use of funds paid through the transaction cost - benefit analysis to determine the relationship between borrowing. The point of view of macroeconomic analysis, interest rate fluctuations reflect changes in market conditions of demand and supply of capital, when capital demand, reduced supply of funds, the rise in interest rates; the other hand, when the supply of sufficient funds, a relatively flat demand for funds, the decline in interest rates. Contact rate is the best real estate market funds and the intermediary, then changes in interest rates will inevitably affect the supply and demand of funds, the impact of the real estate market. Note its use of this feature to adjust the interest rate policy by influencing the real estate market to regulate economic operation is feasible and effective. From the impact of the real estate market, the interest rate adjustments will not only affect the real estate market supply and demand, but will also affect the price, and even structural changes in the real estate market. Adjustment of monetary policy means interest rates, the impact of the real estate industry is not short-term, the real estate industry for far-reaching impact. In theory, the market supply and demand of housing is to determine the real estate market prices and the decrease in basic strength. Fluctuations in housing prices, the adjustment of interest rate policy depends on the real estate supply and demand side of the affected party. Therefore, if the lending rate adjustment, whether it is relying on a large number of financing loans for real estate development real estate developers, or rely on bank loans for home buyers, the mortgage will be affected. When the combined effect of accumulated to a certain extent, it will further affect the economic prosperity in our country, the development of pillar industries, as well as people's living standards. Therefore, the interest rate on the property market and even the development of national economy development. Therefore this paper discusses the status of interest rates and real estate development and their mutual relationship, in theory, from the supply side - the perspective of developers and the demand side - the perspective of buyers, respectively, an analysis of the role and impact of interest rates. Together, on the one hand, developers will affect investment decisions. China's real estate financing channels for enterprises a single, through the listing or a small number of direct financing. China's real estate development financing channels for enterprises mainly rely on loans to commercial banks indirect financing, the high rate of assets and liabilities. Real estate development on a large demand for capital, so when the loan interest rates will increase the cost of developers, real estate development and profits and increase their repayment pressures and the burden of running the funds, resulting in insufficient supply, thereby affecting prices. On the other hand make use of bank loans, the mortgage of the home buyers have a psychological effect. Short-term, the increase in lending rates have little effect on market demand, because the individual does not make the average interest rate adjustments to the monthly repayment amount has increased too much, so the short term will not affect the buyers of the normal expenditure then the impact on house prices will not vary much, it only affects their expectations of future prices. However, the long term, prices will rise as a result of the expected rise in interest rates after the consumer's desire to reduce the purchase of capital there are also flows from the bank's real estate market trends. Whether this is for in order to improve the living conditions of the home buyers, or in order to preserve and increase the value of investment buyers, the purchase will affect their expectations, to buy or not to buy deferred. Result of insufficient demand, thereby affecting prices. To put it simply, the real estate market prices and interest rates in the economy was a negative correlation between. Interest rates and the real estate market and the specific impact of the relationship between the extent of the impact and effects of different periods of time difference, it is necessary to up from the empirical analysis. In this paper, through research from July 1998 to July 2007 the price of real estate data and data related to the level of interest rates, using cointegration analysis and the impulse response function of a variety of interest rates and fluctuations in the relationship between real estate prices for empirical research and analysis of different interest in the property price fluctuations. To 1 year, 1-3 year and 5-year lending rate for more than data processing, will be the inflation rate through the nominal interest rate into real interest rates and market prices, including real estate, including four sets of data are seasonally adjustment, the use of unit root test, cointegration test and impulse response analysis of a series of methods to draw concrete conclusions. In general, the real estate market prices and interest rates between the three types of long-term cointegration relationship. In the long term, the continued tightening of interest rate policy will help curb the rapid growth of housing prices, which is also in line with the interest rate policy of the general objectives of regulation. A relatively short period, the price of the real estate market with the 1-year deposit interest rate increase in volatility, interest rates and long-term loans will not immediately have an impact on the real estate market prices. And the long term, because people will be expected to further rise in interest rates, but will increase the real estate market prices. Different lending rate on the real estate market prices of the impact of different directions, indicating the improvement of interest rates on bank loans only in extremely limited time to have a negative impact on real estate prices, and in the long term will increase the price of real estate. Also expected to lower interest rates would increase the buyers of mortgage loans, potential home buyers to stimulate the purchase desire, so that house prices rose. Judging from the extent of the impact of various interest rate regulation on the role of real estate prices vary in size, 5-year loan interest rates above long-term role of the largest, and the 1-3 year lending rate of the smallest role.