The Research On The Influence Of Bank Credit, Supply Constraints To The Real Estate Price

Starting in the80s，China began to implement the system of urban land exploitation andhousing reform. With the deepening of the housing system reform and the advancement ofurbanization, the real estate industry achieved rapid development. The real estate industry hasplayed an important role in giving impetus to the development of related industries,increasing employment and improving residents’ housing consumption structure. In2003, thereal estate industry become the pillar industry of our country. But the rapid development ofthe real estate industry also brought house prices continue to rise. House prices rising too fastcause great pressure to the rigid demand for housing. In the long run it is not conducive to thesustainable and healthy development of real estate industry, it will also have a bad impact onthe development of other industries. Our country introduced a series of measures to controlthe rising house prices, such as control of credit flows to the real estate industry, hittingdevelopers hoarding land, reform of land lending mode. But prices are still high.Based on this background, in this paper we study the influence of bank credit, landsupply constraints to real estate prices by theoretical and empirical studies. This article firstanalyzes the development of our country real estate market conditions. From2003, real estateprices began to rise. In general, real estate residential investment scale has been larger, but thecurrent real estate residential investment accounts for the proportion of investment in fixedassets is lower than in previous years. Observation of the real estate credit market shows thatfrom the lateral perspective, bank credit capital flows more to the real estate enterprise, butfrom the vertically domestic loan proportion is declining in developers funding sources. Inaddition, the real estate industry need supply of land. But the government placed restrictionson land supply, so that land supply can not meet the demand of land. Secondly this paperusing theoretical to analyze the influence of bank credit, supply constraints to the real estateprice fluctuation. Theoretical analysis illustrate that the bank credit to real estate industry willstimulate the demand for housing, on the other hand it also can alleviate the pressure of thedevelopers of funds, improve the developer’s bargaining power. So from the perspective ofdevelopers and housing consumption, bank credit has positive impact on house prices. At the same time, theoretical analysis illustrate that supply is an important driving forces for therising prices. Panel data model analysis through30provinces also prove that excessive bankcredit and land supply are important factors. These factors cause real estate prices rising inmost of the provinces. At the end of the paper, I think that in order to control current highprices, the government needs to adjust the supply of land according to the development of theregional policy, on the other hand bank should effectively control credit funds, to avoid toomuch credit to real estate enterprises.