A Study On The Effect By Interest Rate Adjustments On Capital Structure Of Real Estate Companies

Interest rate is an important means of the national macroeconomic regulation and control and one of the important monetary policy tools implemented by The People’s Bank of China. The People’s Bank of China makes reasonable interest rate policy in order to promote the healthy and orderly development of economy according to the country macroeconomic situation. From2010to now, The People’s Bank of China has continually raised the deposit reserve ratio by13times and loan interest rate by5times, So Interest rate policy has been more frequently used. Since the reform and opening up, China’s real estate market has been recovered and the real estate industry has achieved rapid development simultaneously. Along with contributing to GDP by increase and playing an important role in promoting development of the national economy, The real estate industry has become a pillar industry in china. But the average rate of assets and liabilities of the real estate industry is about70%, The real estate industry relies heavily on commercial loans. Capital structure of the real estate is not reasonable. The interest rate adjustments in recent times are aimed at curbing excessive growth of house prices and suppressing the rapid growth of investment in fixed assets in great extent. In this context, the study of the effects on the adjustment of interest rate to capital structure of real estate enterprise is particularly important.Based on the research and analysis on the basis of existing research results, this paper bases on our country’s real estate company and uses combining method of normative analysis and empirical research to try to probe the effects on adjustment of interest rate to capital structure of domestic real estate companies. I found that the interest rate is an important factor of affecting the capital structure of real estate companies. in the listed companies of the real estate business, the interest rate has affected more the state-owned enterprises than non-state-owned enterprises. I put forward four proposals which is Establishing timely adjustment mechanism to adapt the changes in interest rate environment, actively expanding financing channels to change the status of single rely on bank loans, Speeding up the process of marketization of interest rates and to point to clear direction about how the real estate enterprises deal with the adjustment of interest rate.