The Correlation Mechanism Research Between China’s Urbanization And Housing Prices

Since the reform and opening up, city development problem have been of great concern for the Chinese government. The eighteenth National Congress of the CPC further proposed a goal to accelerate the urbanization in our country. At present, the development of urbanization in China not only promotes social and economic growth, but also improves people’s living standards and stimulates the real estate industry’s development. But there are also some social problems in environmental pollution, traffic congestion and the shortage of housing and land.The rapid development of China’s real estate industry has made great contributions to the city’s construction and expansion. The upgrading of buildings and equipments has brought new face to the city, and it also attracted a large number of rural people to the city. However, because of the short development time in the real estate industry, imperfect market mechanism and the relevant policy which has little effect, the land resource has been excessive exploitation and the real estate price has been grown too fast. Housing price which has been growing up makes more and more rural people being hard to buy urban housing, so they have to give up the idea of settling in urban areas. Because of this, the urbanization process has been slow down. Thus, the relationship between city housing and urbanization becomes one of the attentions of academics and society.Based on the background of present situation of China’s urbanization and housing prices, this article try to use theoretical and empirical analysis to analyze the relationship between urbanization and urban housing price in 70 cities which in different levels. The theoretical analysis shows that the impact of price on urbanization not only has a positive role in promoting, but also has negative effects. Positive effect is achieved mainly through five effects, such as the real estate enterprises, the transfer of population, the government performance, land finance and speculative behavior. Negative effect is achieved mainly by the rising cost of rural people’s citizenization. Urbanization has a positive effect on housing prices, which mainly through the transfer of population, demand for land, environmental pollution, the income of residents and the government behavior. On the basis of theoretical analysis, this article establishes the panel data model to analyze the relationship between housing price and urbanization in different city levels. The empirical analysis shows that the changing of housing price has different effects on urbanization in different levels. The effect from first-line cities to third-line cities shows a rise trend. The effect from third-line cities to fourth-line cities shows a downward trend. The general trend is showing an inverted U type. The Urbanization impact on housing prices from first-line cities to fourth-line cities is showing a U type. The effect from first-line cities to third-line cities shows a downward trend. The effect from third-line cities to fourth-line cities shows a rise trend. The effect of last year’s housing price on this year’s housing price is positive. The general trend is showing an inverted U type. In this trend, the effect of third-line cities is biggest and the effect of fourth-line cities is minimum. Based on the analysis above, this paper further puts forward proper policy suggestion in our country’s urbanization and housing.