Short-term Interest Rate Policy In The Real Estate Market Analysis

This paper is to find out the function of interest policy in the short term. We regard the house-market of Chengdu as objection to make our analysis.In the early year of 2005, the government issue two important policies to the estate-market. In principle, to the purchaser, the interest of loading is improved lightly and the speculator is influenced seriously by implementing harder tax policy; to the developer, the use of land is limited severely, and the load from bank would not be as easy as before. In the long term, the policy will influence the estate-market in many aspects; in the short term, some effects will occur quickly.Firstly, we analyze the condition of market before the implement of the policy. The conclusion is that the house-price in the market is below the equilibrium price, and will rise promptly. Secondly, with regard to the influence of the policy to the speculator and the public anticipation, we make up two hypotheses. One is that there are many speculators in the market and they have controlled the market; the other is that the quantity of speculators is small, and the market is dominated by the public anticipation. Using the model of supply-demand, we conclude the law of the fluctuation of price. Finally, by checking the actual movement of price, we validate the conclusion. As a result, the second hypothesis is accepted.In the end, we draw our conclusion. In the short term, by impacting the anticipation of the public, the interest policy achieved its purpose.