Empirical Analysis Of Fundamentals On Main City Prices In China

Real estate,that connects with the people’s livelihood and economy, is an importantindustry to national interest and human’s livelihood, and plays an important role in improvingthe living conditions of residents and urban and rural areas, promoting consumption,expanding domestic demand, stimulating investment, promoting the construction, buildingmaterials and other related industry and socioeconomic development. With the real estate highspeed developing,the hidden problems gradually highlight. In a series of problems about theallocation of resources and economic development, housing prices concerning the people’slivelihood is the most serious problem. With the prosperity and development of the real estatemarket, housing prices concerning the welfare level of Chinese are also rapid rising, whichconstantly exceed the rapid increasing psychological expectations. The issue of housing pricesis increasingly becoming the focus of attention, present new challenges to the healthydevelopment of economy and the harmonious and stable society.From the impact of the fundamentals of supply and demand of residential prices, articleanalyzes relevant indicators, and determines the rigid demand, investment demand and supplyas the main line, takes the population density, per capita wages, the money supply, interestrates, land prices and housing construction area as the main index. Then through the relevantdata of2001-2012,Chinese35main cities, article uses the panel data model to analyzeinfluence factors of house price and calculates the reasonable housing price of every city, andthe results are compared with the real housing price. And article further analyzes the factorsclosely relating to the basic economic, namely CPI, GDP, rent and income, then makes theincreasing rate of house price than other increasing rate of close factor, and the results are theindexes to analyzes rationality of the increasing rate of house price. Then article uses theentropy method to determine weights of the ratio and further integrates the indexes value, andthe increasing rate of house price by the comprehensive index value, which evidence andsupplement current situation of problem of housing price from the other side.Through combining with the two aspects of empirical analysis, on the whole,articlefinds housing price on the high side. In2006or so, housing price began explosive growth, theactual prices in some economically developed cities are higher50%than fitting prices, somegeneral cities in about25%,serious departure from the fundamentals, then the real estatemarket turned up overheat, and even risk of the real estate bubble. While the main crux ofhigh housing price is the investment demand and the supply of land. And its deep-seated reason is the defects in the field of Finance,which makes a lot of money coming in market,but there is not enough exports, having to push up housing price. In addition, the housingprice control policy made by central government has not formed a long-term mechanism, andin order to protect the local economy and local finance, the local governments do not positivecontrol housing price, failed to implement price control policy, resulting in land prices rosequickly and housing price hard to control. At the end of the article, I put forward somereasonable policy recommendations.