The Impact Factors Of China's Housing Prices

The advancement of the real estate market in China is rapid since the housing reform,which makes a significant contribution to economic development.Recently,however,the housing prices continue rising,and the trends and regulations of them arouse the researchers' interests.This paper takes the long-term trend and influence factors of housing prices as the research subject.First,based on the current situations of the real estate market in China and a literature review of foreign and domestic macroeconomics and real estate prices,this paper constructs an overlapping generations model to study two kinds of housing price rising effects,including residence-driving effect indicating that purchases of self-living houses can bring utility to consumers and results in an increase of price,and investment-driving effect that the value of the purchased houses would be appreciated,thus the consumption level would be raised indirectly and the housing prices would be increased.Later,this paper chooses the empirical method,based on the calibration method and the econometric method,to carry out the empirical analysis.The result shows two points of view.First,the direct drive mechanisms of the rising real estate prices are the residence-driving effect and the investment-driving effect from the consumers,which can explain more than 95%of China's housing price growth.And about 60%of the growth is triggered by the investment-driving effect,compared to that of 25%in the United States.Second,consumers' high expectation of housing prices due to rapid growth of corporate TFP and excessive share of capital output is the major indirect factor that results in over-investment of real estate.The consumers' expectation of economic growth,coupled with the shortage of means to allocate assets,poses an enormous pressure on the demand side,which leads to the over-allocation of real estate investment.Based on the theoretical research and empirical analysis,combined with the relevant policies introduced recently by the government and the mature experience abroad,this paper provides the policy advice on the future development and regulation of the real estate market in China.