The Rmb Exchange Rate Fluctuations: An Empirical Study Of Relationship Between China's Real Estate Prices

Historical experience shows that, exchange rate fluctuations will often cause asset price especially virtual asset prices fluctuation.Since1998the real estate from physical distribution to the monetary allocation, China’s real estate prices are rising dramatically. On July21,2005, the RMB exchange rate reform, began based on market supply and demand with reference to a basket of currencies, a managed floating exchange rate system.but But China’s foreign trade surplus in long-term, the RMB appreciation increased. And in our real estate market, the international capital proportion has scaled new heights.So, Is there a relationship between the RMB exchange rate volatility and the expected appreciation of real estate prices? which mechanism it through to affect? How much impact?Based on this, this paper firstly in the real estate price decision on the basis of the theory, points out that under the condition of open economy, exchange rate and price of real estate can not be ignored. Secondly, from an economic theory of exchange rate fluctuations, primarily through the expected effect and the liquidity effect, the wealth effect, the effects of inflation, the overflow of money supply and credit expansion effect and other mechanisms to affect real estate prices,and according to the real estate market supply exchange rate real estate prices and demand balance to build model. Then analysed and descripted the course of China’s RMB exchange rate fluctuations and the current situation of China’s real estate market,and pointed out that China’s RMB exchange rate, exchange rate expectations and China’s production house prices existed a certain trends. Again, choose the first quarter of1999to2010in the fourth quarter of the above theory model data to do empirical analysis. The method used to have:the unit with test, cointegration test, impulse response function and variance analysis, etc. The empirical results show that:the long term, the land price, raw material price, per capita disposable income, bank credit, real estate consumer expectations, and the RMB exchange rate and exchange rate expectation work together to promote the rise in house prices. In the short term,onsumer expectations and exchange rate expectations is the greatest impact on the price factor. Based on this, given the policy proposals to curb housing prices, on one hand, the monetary authorities should deepen the reform of the RMB exchange rate system, strengthen the supervision and guidance of the capital flows, control of China’s real estate credit. On the other hand, government policy authorities should suppress land prices, strengthen the guidance of two expected to rectify the affordable housing and low-cost housing market, real estate speculation and hype laws and regulations and do on.