Analysis Of The Factors Affecting Prices Of Real Estate In China

Along with the improvement of people's living standards and the rigid demand to the house, the real estate industry has become an important pillar industry in national economy. In other words, the development of the real estate industry not only links with national economy, but also affects social stability. In recent years, the overheating development of the real estate industry has attracted great public and government attention. A range of measures, which has been announced by the Government to curb house prices, had little effect. Thus, the study for the deep-seated reason of the real estate prices becomes critical.In theory, the development of a country's real estate industry is closely related to the economic development of the country. Also, it was affected by their own specific national conditions and policies, showing different characteristics.With the development of economic, the degree of linkage between the changes of real estate price and the overall economic level will be higher and higher. The macroeconomic fundamentals influence real estate prices directly, while national system and regulations work through the transmission mechanism of monetary or the coercive measures. So, understanding the theoretical basis for the changes of real estate price is particularly important for countries to develop appropriate control measures. From a practical perspective, the real estate industry has a broad impact on many industries, especially the real estate industry is related to the housing problems of our population, so the correct analysis of the factors affecting real estate prices will have an important significance for the health development of real estate industry, sustainable economic development and social stability. Generally speaking, analysis of the factors affecting real estate prices can reveal internal real estate prices factors, which can help to get a better understanding of China's real estate market problems. Through studying the fluctuations of urban real estate price, the relevant government macro-control measures and the effects of policies, policy-makers can accurately grasp the timing and direction of regulation, which provide the support of data and the theoretical basis for the government develop appropriate policies and economic instruments. In addition, real estate developers and consumers' expectations to the future commercial housing price could greatly impact on the fluctuations of the real estate price in a certain time. Therefore, studying factors affecting the real estate price and finding out rules and reasons of the changes can provide information for real estate developers and consumers.The aim of this paper is to explain the reasons of the real estate prices rising through explaining economic phenomena from the economic, social, policy and other aspects. Then, using commodity supply and demand principle to build equilibrium price model, during this process the non-economic factors is quantified as much as possible. On this basis, do fitting regression combined with price data over the years. Finally analyze the gap between the model and the actual by comparing the fitted regression results with the theoretical model. This paper has two different points with previous researches.One is studying the reasons of real estate price rising by combination of economic fundamentals and policy instead of considering economic fundamentals or policy alone; the other is that the model is derived from the theoretical rather than using data to fit out. In other words, the idea of this paper is to test the correctness of the theory by comparing the derived theoretical model with actual data. The follow-up work will make other key affecting factors modeling, and use actual data to get more reliable theoretical real estate prices model which can be used by the government to control housing price.This article contains five chapters:The first chapter introduces the relevant definition of the real estate industry, as well as domestic and foreign researches in real estate industry. The aim is to learn useful things from these researches, while realize various limitations from these methods. The purpose of the second chapter is to clarify characteristics and issues of the real estate industry in different periods, and understand the reasons why the real estate price living in high by analyzing the development process and current situation of China's real estate industry. Chapter three and chapter four are the core of the article. They reveal why the real estate price living in high through analyzing the status of China's real estate industry. After quantifying part of non-economic factors, the equilibrium model is built by using supply and demand's theory. Lastly, combined the fitting regression results with theoretical model, to testify the value and verify the correctness of the theory. Combining with China's actual situation, several recommendations of regulation for real estate prices is given in the last chapter after getting a theoretical model.The data in this article is still insufficient, because most of the data is from the China Statistical Yearbook, which may be not able to reflect the reality of economy due to different statistical methods and errors. At the same time, the selected model may be not able to explain the real estate price strongly due to the variables isn't representative in the model. Thus, this article just provides a tool, a model, its goal is to expand the model and make it coincides with the actual situation, then can be used to as the theoretical basis for practical control prices. This theory is improving.