An Empirical Research On The Relationship Between Urbanization Level And Housing Price In China

Urbanization is a social phenomenon, and is a process of villages turning intocities. This phenomenon of urbanization was shown after 18th century industrialrevolution, and was generated in worldwide no matter how the social system is.Urbanization seems to be a outcome of the development of the productivity, theimprovement of the economy structure and the change of mode of life, being a sign ofmeasuring the level of development of economy and the civilization. In general, thedevelopment of regions or cities tends to match the development of the countries.First of all, this paper reviews the process of China’s urbanization and thedevelopment of the housing industry. Secondly, from the urbanization of the dynamicmechanism and the effects of urbanization factors as the basic starting point, thetheoretical analysis of the interaction between urbanization and housing prices. Again,based on the Analytic Hierarchy Process determination of the integrated level ofurbanization. A number of indicators of the country’s 35 major cities covered by thelevel of economic development, social lifestyle, demographic indicators, as well asecological environment and cultural aspects, the establishment of a comprehensiveevaluation system of the level of urbanization, the use of the analytic hierarchyprocess method for the determination of the major cities city level. Finally, AnEmpirical Study of the level of urbanization and housing prices, based on the salesprice of commercial housing, level of urbanization, urban households, per capitadisposable income, sales of commercial residential area, and other indicators, selectthe country’s 35 major cities in 2000-2009between the sample data, the randomeffects model based on panel data, applications STATA software to solve the model,analyze the results and conclusions, a comprehensive evaluation of the relationship between the level of urbanization and housing prices.Estimated from the model results can be seen, comprehensive level ofurbanization and housing prices have a significant positive relationship between thecomprehensive level of urbanization for every 1% increase, housing prices increasedby 0.2697%; per capita disposable income of urban residents increased by 1%housingprices increased by 0.8621%. Raise the level of urbanization is a manifestation of acity economic development, environmental improvement, suitable living, it willincrease housing demand, thereby pushing up housing prices. Similarly, residents percapita disposable income increased to promote the effective demand for residential,and thereby raise prices.According to the result, a number of policies and suggestions are given from myperspective.First of all, the level of the urbanization is a comprehensive judgment of the city.It is a partial view if seeing the increase of the urbanization as a part of thedevelopment of the cities or a the movement of the people from villages to cities.Secondly, there are a number of factors resulted in the change of housing price,such as the income of the people, the housing selling area. Although the performanceof economy seems to be delightful as result of the high price of the housing price,residents suffer from the unreasonable change especially the increasingly high cost ofliving, thereby moving out of the cities.At last, the development of both urbanization and housing industry should beharmonious. On the one hand, housing is remarkably related to people’s life. Thegovernment is better to pay attention on the fluctuation of the housing price, thedevelopment of the low income housing rather than only on the commercial housing.Under the control of the government’s effort, the housing price will tend to bereasonable. After the reduce of living cost, people can have a better life and morecontribution to the society. On the other hand, from the view of psychology, if people treat the city as theirhome not just a living place, they are going to make a great effort on the developmentof the city, and feel proud to live in the city where they can enjoy its prosperity,modernization, security and comfort. Besides, the effect of this feeling tends to bedelivered to others and absorb more people into the city. According, the increase ofthe people will bring more needs of the housing, thereby boosting the housingindustry.