The Study On The Relationship Between House Price Fluctuations And Bank Credit

Since1998, China has launched housing system reform, the government issued aseries of preferential policies to encourage the development of the real estate and hasformed the current close relationship between the real estate and financial industry.The bank is the biggest supplier of the real estate, on the other hand, it is a good wayto add value if the bank lending money to the real estate. The two industries promoteeach other and develop together. But when they are developing, the continuousexpansion of the bank credit will lead to high housing prices and the rise of houseprice is far greater than the growth of the people income, it will lead to theaccumulation of bank risk and real estate credit risk and the outbreak of many socialproblems. Through the research of the relationship between the house pricefluctuations and bank credit, this paper hopes that it will provide references to thehealth and sustainable development of the real estate, the banking industry even thewhole national economy.At first, this article has introduced the background, the significant, the research statusof this research and summarize and analyze previous research results. On this basis,this paper will systematically discuss and argue the relationship between the houseprice fluctuations and bank credit from theoretical and empirical researches.In the theoretical research，this paper introduces the progress of our real estate andanalyze the reasons that cause the fluctuation of house price. Then, the paperintroduces and analyzes the situation of our banks’ real estate credit. After that, westate the relationship between house price fluctuations and bank credit in theory fromthe aspects of the real estate firm, the bank and the person.In the empirical test, we not only use the time series data of national housing priceand bank credit from Jan.1999to Dec.2010to analyze their relationship from overallsituation, but also use the panel data of30provinces to study their relationship fromthe regional perspective. So this paper’s analysis system is much more mature thanprevious researches. Based on the above analysis, this paper draws the followingconclusions: from the national perspective, there is close relationship between houseprice fluctuations and bank credit. The fluctuation of house price will influence thebank credit and the bank credit will also influence the house price. From the regionalperspective, their relationship is the most tightly in eastern region, then the centralregion secondly, minimum in western region. Though the theoretical analysis and empirical test above, we offer four proposals tocoordinate the relationship between the real estate market and banks’ real estate creditat last.