Study On The Influence Of Money Supply On Real Estate Market Price In China

In recent years,the real estate market price showed a rapidly rising trend in our country,while the real estate market price from 9042 yuan per square meter in June 2010 rose to 12938 yuan per square meter in November 2016,rising by 43.1%.Many local real estate prices have been far beyond the affordability of local residents.In the meantime,the money supply during the period grew rapidly.From the point of the money supply,the increase in money supply could enlarge the amount of fund on the market through the financial accelerator effect,and too much money could enter the field of real estate through different channels.In recent years,the higher rate of return and further improvement of the investment environment in the real estate market have led to the influx of vast foreign capital.The rapid growth of the money supply is the important reason for the rising real estate market price.This paper reviews and summarizes firstly the domestic and foreign literature about the money supply and real estate market price,and the different scholars found the broadly consistent conclusion through different empirical models to study the relationship between money supply and real estate price,namely the growth of the money supply will cause the rise of housing price.Then the paper summarizes and analyzes the condition of the prices change about the money supply and the real estate market price in our country.Based on the general mechanism of the impact of the money supply on the real estate market price,using the monthly data from June 2010 to November 2016,the paper sets up the generalized linear model based on the interest rate data and the vector autoregressive model including the money supply and China Residential House Price Index.It is concluded that compared to the other monthly indexes of QM?M2,the money supply monthly index QM— could affect China Residential House Price Index more significantly and the explanation degree is stronger.With the help of the money supply monthly index QM—,the related departments could enhance the ability to predict fluctuations in the real estate market price.Finally,on the basis of the general mechanism analysis and empirical analysis,the paper proposes that the related departments should control the money supply growth and pay close attention to the fluctuation of the money supply monthly index QM— and the real estate market price.Through the effective cooperation with other macroeconomic policies and monetary policies,the related departments could establish long-term effective mechanism of the real estate market regulation to promote reasonable,healthy and orderly development of the real estate market in our country.