Research On The Relationship Between Stock Market Price And Real Estate Market Price In China

Since China has began reform of the housing commercialization in 1998,the stock and the real estate become two important forms of investment.There are two advantages to analyze the alterable relation between the real estate market prices and the stock market prices.On the one hand,it can be used to analyze the supply-demand relation between the real estate market and the stock market.On the other hand,it can be used to find out the cash flow between the two markets visually,and the investors' forms of investment.On a micro level,it can help the investors forecast economic growth point and plan a reasonable investment portfolio according to appropriate data.On a macro level,it can help government departments implement proper monetary policy and fiscal policy in view of Chinese practical economic conditions,promote stable development of the real estate market prices and the stock market prices,make a reasonable optimization of asset allocation,and achieve the continuing and stable development of economy.In this paper,there are two parts to research the alterable relation between the real estate market prices and the stock market prices.First,it analyzes the alterable relation of prices changing between these two markets.Then,it analyzes the alterable relation of the real estate prices and the stock prices in provinces of different economic development levels.In the process of research,this paper finds out the linear relationship between the two time series variable,the real estate prices and the stock prices.And this paper is written with the help of the VAR model and the Granger causality,IRF,analysis of variance.According to the results,on the whole,there is a positive relationship between Chinese real estate market prices and stock market prices.Partially,the relationship between these two prices has different forms in areas with different economic situations.In developed areas and rapidly developing areas,there is a positive relationship.But there is a negative relationship in some poor areas.This explains in developed areas and rapidly developing areas,when increased investment leads to one market price rising,the investment forms of consumers and investors will become more positive,which will increase investment in the other market and boost the other market prices under the wealth effect,credit expansion effect and macroeconomic conduction effect..On the contrary,in some poor areas,the investment forms will become more negative,which will decrease investment in the other market under the substitution effect and portfolio effect.