Study On The Relationship Between Market Expectations And Housing Price

Real estate has double attributes of consumer goods and capital goods. As commodity, real estate price volatility reflects the balance of power of supply and demand. It is helpful for eliminating of backward production capacity. But recent years, real estate price more shows the capital goods characteristics of "simultaneously same trend of volume and price". Frequent and intense price volatility not only affects the normal operation of real estate market and national economy, but would give a psychological impact to private homebuyers and cause social instability. This paper attempts to explain real estate price fluctuations and give corresponding countermeasures in terms of expectations of market players.This paper is made of five parts. In the first part, we review the related literature of real estate price formation mechanism and the effect of expectations on real estate. In the second part, we analyze the effect of expectations on real estate. Firstly, we introduce the role of expectations from microscopic mechanism, secondly, we describe expectation’s transmission mechanism on real estate market, thirdly, we review the role of expectations in two major international property bubble.The third chapter, we analyze the state of real estate under the perspective of buyers’expectations. We respectively make descriptive analysis on real estate market characteristics, the fluctuations of consumer expectation index from2002to2013.We find there is an obvious linkage between real estate’s price and buyers’expectations through comparative analysis. Finally, we summarize the path of how buyers’ expectations affect macroeconomic control.The fourth chapter, we conduct empirical study on the interaction between price and buyers’ expectations. we take average price of commercial housing、consumer expectations index、industrial growth、the increase rate of monetary supply as real estate price、buyers’expectations、economic growth and monetary policy. Specific monthly data are selected from March in2007to November in2013. In the study,we analyze unit root test, cointegration test, Granger causality analysis and impulse response respectively.Results show that in the short-term, expectations affect price indistinctively, but price has long-run equilibrium relationship with expectations. Buyers’ expectations would take amplification effect on price. Government tends to make contingent decisions to the fluctuations in price.At last, this paper summarizes the main conclusions from the perspective of optimizing expectations, we give some suggestions and point out shortcomings to be improved.