| After decades of development, the real estate industry has become a force which can not be reckoned in the economy, it has made an important contribution to our country economic growth for all these years. But accompanying with the real estate industry booming it is the quickly rising house price. The growth rate of house price is so far from the level of income growth that ordinary people could not afford to buy houses that affect people’s basic needs, and add instability factor to the social. What is more, the high price easily drives investors’irrational speculation, giving the potential risks of the real estate bubble and potential problems to the stable economic development. The excessive prosperity of the real estate market not only invades and occupies a large amount of resources, but also reduce consumers’ investments to other sectors, which is not good for the development of domestic economic.To deal with the excessive growth of house prices, the government has repeatedly regulate and control it, but the regulation did not play well, on the contrary, the price went higher. When the Government is facing a new round of price increases, more stringent and comprehensive measures are taken, but just as Premier Wen said, the price is still far from reasonable.Our government has taken land policy, tax policy and other measures as well as frequent use of monetary policy such as interest rates and deposit reserve ratio to control the quick growth, such as2007, the central bank raised interest rates six times and the deposit reserve ratio ten times, but the real estate prices is far from ideal. Whether monetary policy can be an effective role in the real estate prices becomes one of our doubts.Taking into account many negative effects caused by the rising prices and regulation disadvantages, the paper focuses on the monetary policy in order to analyze the mechanism of action and the effect on real estate prices, so that we can know whether the monetary policy could be a forceful measure to control the real estate market, at the same time we seek the obstacles of monetary policy, and gives policy recommendations. After a review of previous studies, I found that a large number of scholars did research on related topics from different aspects, but did not reach the same conclusion. So I believe that it is necessary to do further research combined with new developments in order to make more targeted recommendations.Considering all above, the core content of this article is consisted of four parts, the first part is a general introduction of the real estate market development and monetary policy over the years, in order to pave the way for analysis; The second part analysis the impact of the monetary policy on real estate development companies and buyers interest rate, credit and currency supply of real estate development companies and buyers with practical factors; the third part we select the monthly data from2002January to June2012of the average price of commercial housing, money supply, more than5-year benchmark lending rate, the real estate investment and real estate sales, we do co integration test, Granger causality test, impulse response and variance decomposition. The fourth part is the combination of the above findings and policy recommendations.By theoretical analysis we know that the impact of interest rates on both the supply and demand would be subject to interference from external factors, the ultimate role of prices is not clear. Credit policy and money supply have a strong positive effect on house price, the credit policies effect is bigger. The empirical results is different from most studies, the interest rates could not impact the house prices smoothly and could not affect the price clearly. Money supply could affect supply and demand, and has a positive relationship with house price; this analysis is consistent with the previous analysis.Above all, combined the results of theoretical and empirical analysis, I put forward several recommendations to increase the effectiveness of monetary policy regulation, including stepping up the marketization of interest rates, effective control of the money supply and strengthen the continuity of policies. |
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