An Empirical Study On The Effect Of Real Estate Prices On Chinese Monetary Policy

China’s real estate market developed very rapidly after the abolishment of welfare-oriented public housing distribution system in1998. The following year’s upsurge of house buying caused by different factors with a price rise also leads to series of social and economic problems. To be frankly, the development of housing market has made much contribution to China’s promotion in the cities’appearance, Economic growth and the related industries’development. However, the quick rise of housing price also got some serious barriers to the Harmonious society building, thus numerous measures have been taken to control the Real Estate market, the most used tool among which is monetary policy. But, what a degree does the monetary policy affect real estate market and whether the effect is obvious are still unknown. There is also a debate among the academia. More in-deep research on the relationship between different monetary policies and the house price, especially the influence on it will help the government to make long-term control policies in the future and also benefit for the academic debate.Based on previous researches and used qualitative and quantitative analysis methods, this paper mainly discuss the effects of monetary policies, including Interest rate, money supply, Financial institutions credit amount, on housing price and compared different regulations’effect. According to the research content, we also carried out a detailed historical stage classification of housing market and monetary policy control, we found that:(1) the frequent policies changes leaded to consumers’instability expectation, thus the Spike phenomenon obviously existed, also the instability of regulations has encouraged the developer to raise the price without any worry, which lead to the inefficacy of the policies;(2) the effects of interest rate controlling housing price is insignificant, on the other hand, excessive increase of interest rate may impair the development for other industries, therefore using interest rate to affect real estate market is not an good choice;(3) comparing with the interest rate, money supply and financial institutions credit amount have significant effect on housing price, thus effectively control these two variables will be beneficial to the real estate market.According to the above research conclusions, this paper gives some suggestions on how to regulate the real estate market in the future. We argues that polices should be stable, excessive and frequent changes of regulatory policies will make market expectation disturbance. In the long term, government may consider using the money supply and financial institutions credit amount to affect the market. Secondly, government needs to establish an effective real estate monitoring system as soon as possible, especially for the major cities. At the same time, government should monitor and counsel the flow of hot money to prevent it into the real estate market.