The Influence Of Monetary Policy On Real Estate Prices In China

The real estate industry has been in a stage of rapid development since 2000, its role in boosting economic growth is gradually obvious, but because the real estate industry remain develop rapidly, its brings the price rising phenomenon has caused a lot of influence on the social economy, financial development and resident life. A country’s macro-control policies especially monetary policy will influence the real estate market,such as the expansion of the monetary policy will increase the money supply, lowering interest rates, improve the credit, so as to encourage investment and consumption in the real estate market, and further promote the rise in house prices, stimulate the economy.Although since 2003, China promulgated a series of policies to curb the rise in house prices, but the outcome was unoptimistic. Therefore, in order to maintain economic stability, and use of policy rationally to control the real estate industry, carry out its healthy development, has become the focus of the monetary authority is now.This paper adopts the method of combining normative and empirical. Firstly, the concept of price and monetary policy are defined, and examines and explains the related theories, such as the Marx value price theory, western economics price decision theory and western economics theory of monetary policy. Then carries on the analysis to the monetary policy mechanism affecting the price of real estate, respectively introduce how monetary policy through interest rate, credit way and portfolio effect the real estate supply and demand, and the analysis of monetary policy is how to influence the supply demand relations to determine the price of real estate. Then we review the main monetary policy in China since 1979 implementation, combined with the evolution of China’s monetary policy, analysis monetary policy and real estate price, and makes the corresponding explanation, come out that a reverse relationship with interest rate and real estate prices, a positive relationship with money supply and real estate prices, and makes the simple summary on the current development of China’s real estate market and analysis main reasons from four aspects that why rapid rise in real estate prices. Thirdly, through the selection of the interest rate and the money supply as an indicator of monetary policy, using the correlation test, ADF test, VEC model, cointegration test, Granger causality test, impulse response, analysis method empirical study on real estate prices, interest rates and money supply that will have an impact on real estate prices, significant influence and money supply on prices than the interest rate effect, this is because the interest rate has a time lag, however, there is a profound significance influence of interest rate on real estate prices. Finally, in combination of theoretical and empirical analysis, from the aspects of reform and perfect the monetary policy system,on how to improve the efficiency of China’s monetary policy transmission mechanism of real estate prices, come out policy suggestions for promoting the real estate industry develops healthily.