Housing Credit Policy In Kunming Housing Market Impact Analysis

Real estate, an engine for national economic development as well as economicgrowth points, has greatly impacted housing conditions of urban dwellers. Moreover,it also improves consumption structure and people’s livelihood, increasesemployment, improves the optimization of industry structure, as well as integrateddevelopment of economy. But with the boom of the real estate industry in the recentyears, the price of housing has continuously risen rapidly. The Chinese governmentinitiated a macroscopical policy to adjusts and control the market in order to restrainthe rapidly rising of housing price and prevent arising economic bubble.On26th January2011, the State council issued a new legislation policy knownas:“The General Office of the State Council on Further Strengthening the Regulationof the Real Estate Market Related Issues”. This policy was enforced to regulate thereal estate market housing price, the housing guarantee, real estate taxes, credit policydifference, land supply, accountability mechanism and purchase-limitation measures.This is in line with the key focus of the Chinese government’s12th Five-Year Plan onimproving the stability of housing price and restraining profiteering. This thesiscontent draws from the Government’s Housing credit policy on a macro level inadjusting the control of real estate pricing, and analyses the how the changing creditpolicy has impacted Kunming’s housing market. This thesis has six parts: the firstchapter includes setting forth research purpose and significance, studying this fielddomestic and abroad. The second chapter focuses on summing up the theoreticalfoundation. the third chapter discusses the conduction mechanism of home loan inhousing market, and discusses how interest rate and change of credit amountinfluences the housing market. the fourth chapter then focuses on analyzing theoperating situation in Kunming’s housing market, the empirical comparison betweenreal estate investment fluctuation and fixed assets fluctuation, housing purchasingpower of urban residents in Kunming, the situation of the residential market supplyand demand and credit status. The fifth chapter is the empirical research of this thesis, which is the researched credit policy influence on Kunming housing supply anddemand with quantitative analysis method. Among the methods used are theIndividual housing credit and amount of real estate development and sales asdifferentiated credit policy macroeconomic variables. Based on the regression modelconstructed, the conclusion found was that Individual housing credit and amount ofreal estate development and sales have positive effect on housing price withco-integration test and error correction model. Therefore, the differentiated creditpolicy does influence the housing market. The sixth chapter, based on above analysisand research concludes the thesis by putting forward some key suggestions based onthe findings.