A Study On The Influence Of Exchange Rate And Interest Rate Changes On Real Estate Prices

With the study methodology of combining the micro analysis and macro analysis jointly and binding the positive analysis and the normative analysis together, this thesis focuses on the interaction mechanism between the exchange rate which is on behalf of the relative price of domestic and foreign capital, as well as the interest rate which is on behalf of domestic funds and the real estate prices. And also it carries out a specific analysis against the actual situation of our country. In the analysis of different factors and reactions of the property market, the currency market and the commodity market, this paper summarizes the interaction of the exchange rate and the real estate prices as the expectation, wealth and spill-over effect. It sets up a mathematical model on the most persuasive mechanism of expectation effect to prove that the expected revaluation of RMB exchange rate will lead the estate prices up. At the same time, this article makes use of the "Impossible Triangle" theory to explain the different impacts when the exchange rate shocks different countries' real estate markets, providing a reference for the prevention of domestic real estate bubble. For the relationship between interest rates and real estate prices, this article studies from the perspective of the demand-side and the supply-side separately. By the empirical tests between Chinese real estate prices and the actual deposit and lending rates of, it concludes that for the short term, interest rates affect housing prices negatively, and for the long term, there exists a positive impact for one-year real interest rates of commercial loans on housing prices. The article also analyzes the role of the interest rates in the United States subprime mortgage crisis, pointing out that the wrong interest rate policy will harm the real estate market and even the economy as a whole. Therefore, at this stage, it is better to choose the appropriate interest rate means to control the real estate market. It is conducive to maintain the stability of our country's real estate prices and to promote the stability of macroeconomic and financial market.