On The Dynamic Relationship Between Stock Price And Real Estate Price In China

The dynamic relationship between stock market and real estate market has always been the key point in the academic area, which plays an important role in the economy development. On the one hand, the capital market plays an extremely important role in economy development. In China ,after 2007, the market value of stock exceeded GDP for the first time, which was increasingly prominent to promote the economy reform and development and to improve the allocation of financial resources. On the other hand, the real estate is one of the key parts of the whole society wealth. The real estate prices decide the wealth of society and residents, influencing the development of industrialization and urbanization process. And the fluctuations effect the financial system and the stability and development of macro economy. Therefore, we will reap the benefits of giving a research to the dynamic relationship in order to level off national economy and improve residents welfare.This paper expounds the background and significance of studying the relationship between stock prices and real estate prices, discriminating the achievements of the existing theories, pointing out the domestic study being limited in the qualitative research and lacking of the theoretical foundation and the support of empirical studies. On the basis of the research achievements, this paper firstly analyzes the fluctuations of real estate prices with the help of the domestic actual situation, the constructing model of the supply and demand, and the mode of the equilibrium prices; then, the relation between the macroeconomic variables and the stock prices fluctuations is theoretically analyzed, and correlation analysis is carried out with the help of various economy variables and the Shanghai index annual data, and Granger causality and co-integration relationship is to be tested with the corresponding monthly data. Finally, based the above research, the paper analyzes the variable factors of effecting dynamic relationship,which shows that the main factors were the macroeconomic environment and the relevant policies.