Research On Effect Of Monetary Policy To Development And Investment Of Real Estate

The development of real estate has been extremely rapid. Real estate industry has become a pillar industry in China. Real estate is also closely linked with people’s life, so real estate has an important relationship with the economic development and people’s life. As real estate has double attributes of consuming goods and investment goods, the investment of real estate has been higher and higher, and the situation is becoming overheating, seriously affected the normal economic development and people’s life. To solve these problems, the state has promulgated relevant policies to regulate real estate. Monetary policy is one of the important policy of real estate regulation, the different monetary policy will produce different effect to real estate investment. Therefore, there are important realistic effects and theoretical significance on the study of the influence that monetary policy to real estate investment.The study about the effect of monetary policy on the real estate investment in this paper includes the transmission mechanism of interest rate, asset price transmission mechanism, the bank credit conduction mechanism and the conduction mechanism of the enterprise net. This paper first study the theory of monetary policy and transmission mechanisms. To establish the multiple regression model and VAR model, there will be an empirical test of the impact of monetary policy on the real estate investment. The choices of the variables in the model based on the theory before, all the variables include:inter-bank lending rates, the broad money supply, the deposit reserve ratio, bank credit, exchange rate. As the important effects of fiscal policies during the process of real estate regulation, down-payment requirements of the second house will be chosen as a controlling variable represents fiscal policy. And the amount of investment in real estate development was chosen as the variable of investment in real estate development.Through multiple regression, the relation of every monetary policy variable to effect of real estate investment will be found, it also found that the interest rate doesn’t have significant effect on real estate. Reserve requirements is a weak role, and so is the exchange rate. Money supply and bank credit both have strong effect on real estate regulation. Then through the VAR model, impulse response function and variance decomposition, the conclusion is the role of interest rates is not significant and the same results have been confirmed. The lag of monetary policy has been found through empirical testing. Money supply and bank credit take at least two or three period lag, exchange rate also has one period lag.Policy advices are put forward from five aspects based on the analysis of the empirical results, including shortening the policy lag, speeding up the marketization of interest rates, contraction of the money supply, the coordination of monetary policy and fiscal policy and guiding rational consumption.