Research On The Anchoring Effect Of China 's Real Estate Market

Real estate industry is the basis of the economy, the leading industry and the pillar industry. Real estate products not only offered the means of subsistence, but also the means of production. Real estate brings basic space for peoples’ life and economic activity. Also it is the main driving force of Chinese economic and has a direct effect on the development of Chinese economic. However, following the accelerated process of urbanization, the scarcity of urban land has become increasingly prominent and real estate prices in major cities rise sharply, which also pose serious problems. From a national perspective, the real estate market has shown signs of overheating trend, prices also appeared abnormal fluctuations, which mainly reflected price increases and GDP rose uncoordinated, the rates of price and income relatively high and fluctuations in different cities are quite different and so on. The price of real estate of most cities have a bubble, the reason of real estate price fluctuations become a social universal attention.The paper uses behavioral finance theory and the prospects for anchoring effect from psychological theory of cognitive of the investor of the real estate market to analyze the reasons for the price fluctuations, as well as its impact on the real estate prices. Firstly, we analyze the effectiveness and the rational of the real estate market At the same time, we describes the mechanism of the anchoring effect of the real estate market from the psychological characteristic of the subject property and the features and attributes of the real estate market. Further, on the basis of theoretical analysis, the paper using the panel VAR(PVAR) model to test the anchoring effect of the real estate market and analyze the difference of eastern, central and western regions in detail, and the study shows that anchoring effect exists in China’s real estate market, after the sub-region, the anchoring effect of the eastern and western regions is not obvious, while the anchoring effect of the central area real estate market is obvious. Finally, we analyze the impact of the anchoring effect on the price fluctuations, and accordingly we put up some proposals to the healthy development of the real estate market.