Research On Regulatory Mechanism Of Monetary Policy To China’s Real Estate Price

Since1989, China’s real estate market has a sustainable and rapid development, and the real estate industry has become more and more important in the national economy. Behind the development, great importance has been attached to the healthy development of the real estate market and many real estate control measures has been taken which released by the government, ranging from2003to2013. Although China has researched the control policy of the real estate for a long term, the outcomes is still unpleasant. With the control measures, real estate prices didn’t fall as expected, but continue to rise. At the same time, the developed countries have more experience on the regulation of the real estate market, but those experiences can’t be applied to China directly as the different national conditions and development stages. Therefore it’s necessary to study real estate price control mechanisms of China. This article discusses the real estate price control mechanism from the perspective of monetary policy.The first part of this article reviews related research achievements in recent years, then elaborates the decision theory and equilibrium theory of the real estate price. After that, the article describe the intermediate targets of monetary policy, and theoretically studies the regulation effect of monetary policy on real estate price from three aspects:interest rate, reserve requirement ratio and bank credit.After that, the article uses the latest data and charts to describe the current situation of China’s real estate market, and points out the existing problems. In the next part, there is a empirical research, using VAR model to explain the relationship between monetary policy and real estate prices. The results show that interest rate, reserve requirement ratio and bank credit all Granger cause real estate prices. Among them bank credit has the greatest influence on real estate prices, and they is a positive correlation between them; followed by the deposit reserve ratio, which is negatively correlated with real estate prices. Against all expectations, interest rate has no significant regulation effect on real estate prices. Finally, according to the empirical results, put forward some relevant policy recommendations in order to promote the healthy development of the real estate market.