A Study Of Commercial Property Price To Income Ratios Under Different Objectives

Currently in the research field of commercial housing price to income ratio, the majority of domestic academics is using the basic formula for calculation, or basing on the formula to make adjustments on calculation factors of the ratio. Generally, they are trying to reflect all associated factors by using only a single formula.The writer believes neither from a general nor a practical point of view could the result of such methodology objectively illustrate the relationship between supply and demand in real property market. In order to avoid the current general and imprecise estimation method, refining and sub-classification of the premise are required. The calculation of commercial housing price to income ratio should base on an analyst's different objectives, making it more effectively, specifically, and scientifically in satisfying its different aims. On these grounds, the author set four main targets for this ratio for the first time: investigation of residents'purchasing power, prediction of future trends in housing prices; determination of the rationality of the structure of market housing price; adjustments to the benchmark interest rate of individual housing loans.This paper bases on theories associated with commercial housing price to income ratio, such as the principal component analysis, supply and demand theory, urban theory, income and consumption theory and location theory, and findings of both domestic and foreign academics, incorporating with the actual situation in our country, researched and established the estimation basis, formula and reasonable intervals for commodity housing price to income ratio, took Nanchang as an example and made a further estimation and analysis. It provides basis for the analysis of current condition of properties market and provides market basis for further development of macro-control strategies.