Study Of Determinants Of China’s Real Estate Prices And Countermeasure Under Background Of Government Regulation

The Chinese government has strengthened the regulation of the real estate marketsince2010. This paper established a panel data model by selecting the monthly data of47large and medium-sized cities across China from July2010to November2012. Asstated in the paper, price of land, house selling volume, real estate investment and realestate investment capital from bank were main factors, accounting for the house priceof the eastern region, the central and western areas of China. The thesis concluded fourresults. In the first place, during the property market regulation, the housing sellingvolume in different region or in the city with different degrees of development had anegative correlation with the house price. Secondly, in western region and second city,house price had a positive correlation with the land price, conforming to the traditionalconception that high land price leaded to high house price. Thirdly, the thesis showedthat there were positive correlations between the real estate development andinvestment capital and the house price when it came to the first-tier and third-tier cities.Finally, from nation’s perspective, increasing interest would decrease real estatedevelopment from the bank and increase the pressure of repayment. Therefore, houseprice could be controlled better as a whole in the country, especially for the third-tiercities and western regions.This paper firstly researched the regional differences of property-priceinfluences, explored the different property-price influences of the eastern, central,western city. Then the author examined the differences of property-price influencesamong first-line second-tier and third-tier cities according to the development level ofthe city. The results showed different characteristics of property-price influencesamong first-line second-tier and third-tier cities. Whereby, the conclusions of thispaper were drawn. Based on the conclusions, reasonable policy recommendationswould be proposed. The government should unwaveringly insist on the regulatorypolicy of the real estate market and be active in reforming agrarian systems. The fiscaland taxation system should be reformed to reduce the excessive finance-dependenceon the land. Then the government could control the land price within the normal rangeto promote rational fluctuations in real estate prices. Besides, the government shouldreduce the property bubble resulted from land finance, implement prudent monetarypolicy to curb the excessive growth of property prices, suppress the speculativedemand for housing and expand the supply of affordable housing, actively implement the classification regulation.