Research On Real Estate Restrictions On Problems

Real estate is one of the six pillar industries of Shanghai’s economy, imposing a huge impact on the economic development of Shanghai. Recent years, the rapid rise of the real estate prices in Shanghai has led to a widespread concerns and in-depth discussions. To resolutely curb the rapid rise, Shanghai, in October2010, released the first version of Sales Order. Since Sales Order has been implemented, there are some changes in Shanghai real estate market. However, we still lack academic analysis and research on these changes, especially the study on the relationship between these changes and Sales Order, which will be vital to exactly evaluate the policy results and implement next stage regulation.In this paper, after we introduced the background and academic basis of Sales Order policy, we reviewed and evaluated this policy preliminarily. Then, based on research results from both domestic and foreign scholars, we did an empirical re-search on the factors which will affect real estate prices in Shanghai. Establishing an error correction model (ECM), we studied the impact of regulation policies on the Shanghai composite index of real estate, with the control of macroeconomic variables as well as variables which reflect supply and demand in real estate market. Finally, the policy analysis results and empirical results put forward policy recommendations to further improve the regulation in the real estate market.Through theoretical analysis and empirical research, the main conclusions in this paper are as follows. First, Sales Order is effective, but its effect is limited to curb rapid rise of real estate prices. In addition, it will not last for long. Second, price fluc-tuations in real estate market can be explained partly by macroeconomic variables, but we also found that overheating and bubble in the current situation. Third, the key to regulation is not to restrict purchasing, but rather to manage the price expectation and increase speculators’holding costs. Finally, we still need to work hard in three aspects: establish the regulation body, change the regulation idea and improve the regulation methods.Hope this paper would help all stakeholders in real estate market to soberly know and deeply understand the intrinsic relationship between real estate prices and ma-croeconomic variables as well as others. And we will ultimately benefit from better development of real estate market in Shanghai.