Research On The Correlativity Between The Prices Of Real Estate And Stock In China

As the characteristics of both actual asset and virtual asset of real estate shows up gradually, real estate and stock have been the top two important assets for domestic investors. The main topic of this paper is, "Is there a relatively stable relationship between the real estate price and stock price? If so, which one plays the dominant role? Can we master the asset price fluctuations so as to maintain the sustainable rapid development of economy?"On the basis of literature reviews, we give the thorough analysis on the theoretical level.Then we analysis the relationship between the real estate price and stock price and secular trend of several other countries from the historical experience review. After that, we establish the VAR model and Impulse Response model, in order to analysis the relationship between the real estate price and stock price in the past ten years in China. Finally, it comes to the conclusion that, during the period of 1998 and 2004, there was a significant negative correlation between the real estate price and stock price, because of the portfolio investment requirement. After the year 2005, the real estate market and stock market forged ahead shoulder by shoulder, attributed to the wealth effect and credit expansion effect.