Research On The Relationship Between Interest Rates And Real Estate Prices Under The Background Based On The Pre-sale System

The real estate industry has extremely high industry correlation with other industries andit plays an essential role in the development of national economy, thus the macro-controlpolicies related to the real estate market have always been concerned by the public.Especially, the relation between interest policy and real estate price has attracted theattention of quite a number of scholars. However, the empirical results were somehowdifferent and there were disagreements on the relation between housing price and interestrate policy. The prevailing view in the academic world is that interest rate is negativelyrelated to housing price, but some others hold different views such as that interest rate ispositively related to housing price.Meanwhile, the pre-sale system issue has been another hot spot of housing marketresearch. Scholars seldom combined with the two issues together and research into it.However, the pre-sale issue is closely related to the relation between interest rate policyand housing price, since the real estate industry is highly capital-intensive, the interest ratepolicy is likely to affect the housing price through affect the capital cost of real estatedevelopers first. And the statistics of recent years showed that the charges that real estatedevelopers get in advance thanks to the pre-sale system have accounted for a large part oftheir source of money.Based on the fact that the past researches on the relation between interest rate policy andhousing price have seldom token the pre-sale issue into consideration, this paper combineswith these two issues together and expects to achieve a more thorough understanding intothese issues. The paper has collected data including housing prices, interest rates, pre-salecapital ratio, M2growth rate as well as land prices growth rate of all31provinces of Chinafrom2000to2011. This paper used panel date model to analyze the relations of interestrate, pre-sale ratio and housing price under Eviews6.0. The empirical results showed thatpre-sale issue does have appreciable effect on housing price; the pre-sale ratio as well asinterest rate is positively related to housing price if they are considered separately;however, the result of this paper showed that there were mutual inhibition effect betweenthe effect of interest rate on housing price and the effect of pre-sale issue on housing price,which could lead to the result that in fact the interest rate turns out to be negatively relatedto housing price under current interest rate level and range.