Study On The Price Layering Effect Of The Relation Between Bank Credit And Real Estate Price Fluctuation

Over ten years of housing reform, real estate market has witnessed prosperous development, becoming a pillar of national economy. As the major financing channel of supply and demand sides in real estate market, commercial bank credit is in close relation to the real estate market. And therefore, real estate credit accounts for an increasingly higher proportion in commercial bank credit, and most funds for the real estate corporations developing projects come from domestic loan, in which we can see the close interdependence. The interaction between the real estate price and bank credit will not only affect its own instability, but will also further enlarge the risk and economic fluctuation of the financial system through financial accelerator.This thesis explores the interaction mechanism between the real estate market and bank credit in short and long terms as well as its signaling pathways, so as to enable the government conduct macro-regulation and make effective suggestions for the risk management of commercial bank credit. In addition to this, based on the national condition of the supply and demand imbalance in different tier of cities, this thesis conducts a research in price stratification effect between real estate price and bank credit, which will be conducive for government implementing the policy of reducing the unsold houses in accordance with different conditions as well as differential credit policy, as a result, the gap between the supply and demand in real estate market will be narrowed down and the regional economic structure will be upgraded. Above discussed points clearly prove this thesis is of significant theoretical and practical importance.This thesis has six chapters. Chapter one is introduction, concluding research background and significance, the outline and framework of the research, research methodology and the deficiency in innovation. Chapter two is literature review, in which concludes the relationship between real estate price and credit; the unstable relationship between real estate price and finance in domestic and overseas researches. Chapter three is the summarization of status quo, containing the status quo of real estate market and housing bank credit, directly and comprehensively showcasing the interdependence between the two. Chapter four is theoretical model analysis, which first introduces the interdependence between bank credit and real estate price, and then establishes basic theoretical model from the supply and demand sides to analyze the influence from bank credit, housing price and other macro factors. Chapter five is empirical analysis, first conducting a research on the short and long-term relationship between bank credit and real estate price based on ARDL model; then adopting GMM to evaluate the existed price-layered effect from bank credit on housing price by dint of constructing three groups of dynamic panel data on high, middle and low level housing price. And finally, from the perspective of family credit, making panel evaluation on the relationship between housing price, family credit and the risk of banks with consideration of predicated factors. Chapter six is suggestions to policy makers. This thesis puts forward a series of proposals to policy makers such as to prudently adopt monetary policies, specify and differentiate credit policy, promote the indemnificatory apartments, reform the property tax, develop consumer finance and strengthen financial regulation. Innovations in this thesis:1. In terms of the outline of this thesis, it has both vertical and horizontal contrast with the pursuit of depth in a progressive fashion.2. Regarding empirical method, this thesis sets out ARDL-ECM model based on the limited data sample and time series. Given the imbalance of regional development, this thesis further establishes dynamic panel data of 50cities and uses system GMM equation to observe the price-layered differential effect.3. From the perspective of renewing data, this thesis inclines that the 1999-2014 real estate market has prominent fluctuations and a complete cycle of rise and fall, and therefore it is highly representative.4. As for the theme, this thesis is of great practical significance on the ground of national supply-side reform and polarization in the real estate market. The suggestions made by this thesis would be beneficial for the government to implement the macro-regulation policy, enhance banks' capability to avoid risks and balance the development of regional economy.