The Regional Differences Research Of Bank Credit’s Inlfuence To The China’s Housing Prices

Since the reform of the housing systematic implementation in1998, China’s realestate industry gets more rapid development than before. It also continues to rise inprice. In the case of large inflows of credit funds of banks, real estate market shows ascene of prosperity. As the real estate industry is a capital-intensive industry, realestate business in real estate development had to rely on bank loans, while mostresidents to buy commodity housing also should rely on personal housingconsumption loan from the Bank. In the excessive financial support, housing pricesrose rapidly, which makes ordinary people looking so disappointed on one hand,because it is difficult to buy a house; the other hand, it may lead to the real estatebubble, triggering a financial crisis.For the existence of China’s economic development and regional imbalances, it isnecessary to study the impact of Bank credit to China’s regional house prices. InChina’s national conditions, we analyse the development trend of China’s real estateindustry from the national level. According to the classic literature of theclassification method, the country is divided into eastern, central and western regions.Then we the status quo of each area of bank credit, real estate prices and newconstruction a analyse rea. Then the introduction of three models developed to explainthe bank credit and the relationship between real estate prices, and find the variablesrequired for the model to establish indicators.Through empirical analysis, we get the following conclusions. First, the westernregional bank credit on real estate prices was not significant, indicating that themethod can not be generalized to the tightening of credit policy. The western regionof rising house prices is due to the disposable income of urban residents caused by thesharp rise. Therefore the most appropriate approach is to increase housing supply torelease more rigid strong demand. Second, the new construction area of this indicatorcan be measured in the region if there is a real estate development companiesdeliberately store, cover plate reluctant sellers raise prices and other maliciousbehavior. Third, the interest rate on real estate prices will have a positive effect. Thegovernment, seeking to control the prices of real estate by raising interest rates, willnot achieve the desired results. On the contrast there is a certain degree of price rise,indicating that monetary policy is lagging behind. Therefore, for China’s national conditions, regulation of prices should be reducedin order to control credit expansion and liquidity of the main quantitative tools,supplemented by interest rates and other prices.