Research On The Dynamic Relationship Between Real Estate Credit And Real Estate Market

Accompanied by rapid development of the national economy since the reform and opening up, China’s real estate market trends in the rapidly expanding, especially in the housing system reform after1998, the real estate industry ushered in the golden period of development, people rush to buy or invest in real estate Real estate has also become an important industry to the national economy, but at the same time there are many problems along with the rapid development, such as market bubbles, financial risks and other issues.Learning from the experience of overseas development, when real estate market trends in the rapidly expanding there are also kinds of threat to a healthy market development. While there is a close relationship between banks real estate credit expansion and real estate development. On the one hand, the prosperity of the real estate market cannot occur without the support of the real estate credit; on the other hand, the rapid expansion of real estate credit increasing bank’s potential risks which beyond the control can easily lead to the real estate bubble burst, and thus it will have a negative economic impact on the real economy as a whole. China has experienced more than ten years of real-estate boom period of development, there are also kinds of threat to the finance and real estate market. Therefore, it is particularly necessary to learn the relationship between real estate credit and real estate prices and the intrinsic conduction mechanism, so as to avoid the emergence of foreign development.The purpose of this study is to explore two questions:1. What is the relationship between bank’s real estate credit and real estate prices, if there is a two-way interaction between them, how to portray it? If such a relationship exists, how the bank’s real estate credit affects the real estate market supply and demand? It’s helpful for us to analyze in maintaining the real estate market and financial market stability after the correctly understanding these two questions.Research ideas of this paper is side-oriented by the above two questions. First from the summary of the literature in chapter I we found that bank’s real estate credit is positively related to real estate prices in general empirical conclusion, but most scholars study is based on the real estate market bubble perspective and focus on the relationship between bank credit and real estate prices. There is no multi-variable changes in real estate credit and real estate prices, real estate market supply and demand, lacking of a comprehensive analysis of intrinsic spread mechanism between them.In order to answer the questions based on the actual situation in China, chapter II I found that the real estate loans and real estate’s average selling prices maintained a consistent trend since2006. In addition, this paper bank credit funds took up58.6%of real estate development funds. On the other hand, it is mortgage loans funds w hich are also from commercial banks support the investors in real estate sales market.Then in the third chapter, the theoretical model of the interaction between real estate credit and real estate market to provide theoretical support. In this chapter, I analyze the symbiotic mechanism of action between the real estate market and the bank credit market from the perspective of the economic cycle theory.Selected relevant datum from the first quarter of1999to the third quarter of2011, the forth quarter uses cointegration analysis, Granger test, error correction model and pulse function and measurement methods for the first question of the article:the interaction between real estate credit and real estate prices. Then uses the regression equation to answer the second question of the article that bank real estate credit real estate market supply and the impact on demand mechanisms.Finally, Chapter V summarizes the conclusions of this paper is the answer to both questions, namely:(1) the existence of long-term cointegration relationship between real estate credit and real estate prices, and in the long-term equilibrium level the mutual influence of causal relationship;(2) real estate credit real estate development loans and home loans at the same time affect the supply and demand side of the real estate market, the influence coefficient of0.6375and0.4301, respectively.