The Correlation Between The Real Estate Price Fluctuation And The Financial Operation

Real estate industry is a capital-intensive industry, which cannot leave the support offinance from the development to the sales, therefore the relation of real estate industry andfinancial industry are close．To a certain extent, the fluctuation of real estate price can notonly reflect the supply and demand situation in real estate market, but also the operation ofthe financial system and affect each other．We should grasp the relations of the real estateprice and financial stability, which can realize the sustainable development of real estateindustry and financial industry, promote the transformation of our country economydevelopment method．This article tries to study the correlation between the real estate price fluctuation and thefinancial operation．In order to explain their relations, this article first has discussedconduction way between the real estate price fluctuations and financial operation from thetheoretical point of view, which has provided the rationale．The real estate price has theinfluence to the financial system through the property wealth effect, profit report effect andproperty substitution effect’s transporting to financial system, the excessive fluctuation willhas the negative influence to the stability of the financial system as well as the real economyand makes frail financial system full of risk．The financial system movement stable is animportant guarantee of country sustainable economic development．In order to ensure thestability of the financial system, we will adopt financial control policies, and financialstability policy will affect real estate prices through interest rate channel, credit channel andasset portfolio channel．Once more, this article has analyzed present situation to our countryreal estate price fluctuation and financial operation which has provided the realitybasis．Furthermore we are combing their interaction relations in reality．Third，we select sometargets which can represent the financial stability, to carry on the Granger causality test andCointegration test with the house selling price index and build error correction model and usereal diagnosis methods to analyze their relations．Finally, combined with the previous analysiswe put forward the corresponding policy suggestions, namely to appropriate financial controlpolicy to ensure that financial system and real estate industry to be able to develop smoothly．...