Study On The Impact Of Monetary Policy On Real Estate Price Based On VAR Model

Since the reform, the real estate industry, as a pillar industry of the national economy, not only developed vigorously, but also promoted China’s economic growth. Although the real estate industry has brought considerable economic benefits, however, in recent years, the rapid growth of real estate prices has given rise to a serious social trouble; what’s more, it has planted sharp hidden danger in macroeconomic fluctuations. At present, the housing prices have become the focus topic of the national people, and how to inhibit the rapid growth of the real estate prices is also an important content of the national macroeconomic regulation and control. Monetary policy is an important factor which will affect the development of the real estate industry. In order to safeguard the stability of the real estate market and achieve macro-control on housing prices, the central bank has adjusted the deposit and lending rates and the money supply time after time. Therefore, at this stage, to study the influence of the monetary policy on housing prices of great importance and can provide a reference value for the country when formulating relevant policies.Through literature study, we can find as a dynamic model, VAR model used actual economic data rather than economic theory to determine the dynamic structure of economic systems, and gradually replaced the econometric models which was based on the classical theory. VAR model has been widely used in forecasting macroeconomic. To analyze the relationship between macroeconomic variables, it is a powerful model. This paper analyzed the relationship between the two with the vector auto regression model.Based on summering the domestic and foreign scholars’research on the relationship between the monetary policy and the real estate price as well as the monetary policy on the real estate market in our country, this paper studied on the relationship between the monetary policy and the real estate price from the microeconomic theory of supply and demand. On the basis of the above work, selected interest rates and money supply as monetary policy indicators of this study, took Liaoning province as an example, collected quarterly data from2003to2013, utilized the software Eviews7.0, established a vector auto regression (VAR) model of lending rate over five years, money supply, urban residents’ disposable income and housing sales price for empirical research. In the analysis of the VAR model, determined the effects of various indicators on real estate prices with the impulse response function, compared the contribution of each index impact on the real estate prices with variance decomposition methods.The study indicated that lending rate more than five years had a positive impact on the real estate prices, but this effect is relatively weak; money supply had a long-term positive effect on the real estate prices; household disposable income also had a long-term positive effect on the real estate prices, and the effect fluctuated in the early larger. The urban residents’ disposable income had the biggest t contribution on affecting the housing prices; followed by money supply; the contribution of lending rate more than five years was the minimum.These conclusions can prove that reducing the supply of money supply, the real estate prices of Liaoning province will decrease, the money supply regulation is effective; the lending rate more than five years has a weak positive effect on the real estate prices, if taking a hike policy rates, the housing prices will still rise, the is interest rate regulation going to fail nearly.