Empirical Approach On Monetary Policy Adjustment And The Real Estate Enterprise Performance

The development of the real estate market began in 1998, and since 2003 it has been going through rapid development to become one of the pillar industries of the economy in China. For the sustainable and stable development of economy, Chinese government attaches great important to the development of the real estate market and adopts a number of policies to guide the healthy operation of the real estate market. Generally, there will be problems existing in the rapid development stage, which are not easy to be found. But these problems will become a bottleneck at development stage. The operation of estate market since its formation is not so stable or healthy, which even experiences ups and downs. Therefore, the introduction of various policies has undoubtedly added a lot of unanticipated factors during the operation of the real estate market. During the 2008 financial crisis, economy entered a downward trend as a whole. The government introduced a number of policies to stabilize the economic development, including different ideals and frequent controls for the development of the real estate market to minimize turbulence in the real estate market. Frequent controls of the real estate market by the government, especially monetary policy adjustment in macro-control policies, have great and direct impact on the performance of the real estate business. This paper studies the impact of monetary policy adjustment on the performance of the real estate business, which provides theoretical support for the effect impact of monetary policy adjustment on the performance of the real estate business to explore the most effective monetary adjustment policy for the development of the real estate business.Through collection and analysis of various monetary policies enacted since the formation of the real estate market, this paper points out that monetary policy adjustments are not invariable. In recent years, the supportive monetary policy in 2008 has been changed to prohibitive monetary policy in 2010. Since 2010, the government has introduced a series of the "most severe" control policies to curb the expansion of the real estate market. After 2014, the real estate market experienced decreasing development. In March 2015, new "notice" was issued that the down payment for the second house was adjusted to 40%, and the accumulation fund 20%. So far, it has returned to supportive policies in 2008.This paper focuses on the impact of monetary policy adjustments on the real estate business performance. It conducts empirical analysis, selects financial data of 72 listed real estate companies in Shanghai and Shenzhen from 2010 to middle 2014 as the study object, and applies SPSS software for factor analysis. The results show that: from 2010 to middle 2014, the estate market has been developing under the constrictive monetary policy, and real estate businesses have responded in varying degrees to the constrictive monetary policy. Under the tight monetary policy, there occurred "negative react" in aspects of sales price, sales volume, and the cost of housing construction, capital turnover rate, financing credit lines, and financing costs in the real estate market, which altogether resulted in negative impacts on the real estate businesses.Through empirical analysis, it is found that: tight monetary policy has brought negative impact on the twelve indicators which reflect the four capacities, including solvency, operation, profitability, and development in the business performance evaluation system of the listed the real estate companies. Then this paper makes recommendations accordingly: under tight monetary policy environment, real estate enterprise should adjust its development strategies and put forward innovative marketing programs to reduce the impact of tight monetary policy, in order to maintain healthy and stable development of the real estate market.