Research On The Different Regional Effect Of Real Estate Price To Monetary Policy

Since China’s housing currency reform, real estate industry has been rapidly developed, and the real estate price has been rising accordingly. The real estate price affects not only the stable development of the economy but also people’s quality of life. The issues of the real estate price have started to become an obstacle to the healthy development of China’s economy. More and more scholars began to study the real estate price. Based on the theory of monetary policy, this paper studies the different effects of monetary policy on real estate prices in different regions.Firstly, in this paper, we theoretically have studied the monetary policy transmission mechanism in our country and how the transmission channels of monetary policy influence real estate price, including the interest rate channel of monetary policy, exchange rate channel of monetary policy, credit channel of monetary policy and the anticipation effect of monetary policy. Meanwhile, the macro-regulation policies which include deposit-loan interest rates, the deposit reserve ratio and credit policy for China’s real estate in recent years, have been reviewed in this paper. Secondly, in order to study the regional effects of monetary policy on real estate prices, this paper has divided our country into three major economic regions. Moreover, we have analyzed the house price trend under the influence of the real effective exchange rate, the per capita annual disposable income of urban households, the real interest rates, the money supply M2and the country’s economic growth rate. Also we give the contrast analysis of the regional house price. Thirdly, several important variables in three economic region which influence the real estate the most, such as domestic loan amount, the real effective exchange rate, the per capita annual disposable income of urban households and the real interest rates, have been adopted for empirical analysis. Using panel data analysis of individual fixed effects model, this paper has analyzed the affecting factors of house prices. The results showed that the same instruments of monetary policy in different referent regions have different impact on the house prices. Then, regional differences of the economic development level, of Economic openness, of the financial markets, of the financial institutions, of financial ecological environment, of the Real estate enterprise scale have been compared among east, west and central economic regions, and those differences has well explained why monetary policy have the different regional effects on the real estate price. Finally, this paper makes different policy suggestion depending on the different regions.