Study On The Impact Of Credit Policy On Housing Price In China

China's real estate market has achieved outstanding results since the market-oriented reform in 1998.On the one hand,it originates from the huge demand generated by economic development,on the other hand,it benefits from the support of financial policies.The real estate commodities rely on support of bank credit heavily in the whole process of construction and transaction because of its financial attribute,and the credit policy has then become a useful tool to regulate the housing price.In recent years,house prices continue to rise as a result of easy monetary policy,at the same time,the expansion of shadow banking has become one of the important financing channels in real estate industry.According to statistics,a period of rapid growth of bank credit and shadow banking is always followed by sharp increase in house prices.In some areas where the economic and financial markets are more developed,the real estate market is overheating and showed signs of irrational investment.This paper is organized as "question-description-problem analysis-problem solving",and works on the topic of credit impact on housing prices.The paper firstly described and summarized the current situation of real estate market and real estate finance market,then discussed the credit impact on housing price in theoretical level with shadow banking concerned.Real estate development enterprises in China are highly dependent on bank loans for financing.When the credit is tightening,real estate developers have to turn to shadow banks seeking capital supplement.Since shadow banking system in our country is dominated by commercial banks,bank credit and shadow banks usually form a substitute relationship.Credit affect the formation of equilibrium prices both on supply and demand.For developers,the size of the loan influences developers' financing ability,the cost of capital,and supply of real estate.For house buyers,credit policies affect purchase decisions,in turn,affects the demand.Meanwhile,shadow banks influence the housing price on the supply side by affecting the financing ability of developers.By using the Carey land price model,it proves that the increase of credit leads to higher equilibrium price in the market.In the empirical part,we first selected the data of the national level to establish SVAR model,confirming the positive impact of credit scale to real estate investment and housing prices.Shadow banking is good for growth in the long run,but it also exacerbates the housing boom in the short term.In order to further study the structure characteristics of the real estate market in different regions of the country,we selected several cities as samples of the eastern,central and western regions,and established state space model.State space model precedes traditional fixed parameter model in that it reflects the sensitivity change during a period of time.The empirical results showed that housing prices in the east are highly sensitive to capital supply,including shadow banks,and income has been unable to explain the high housing prices in these areas.In the middle and west,there is a clear positive correlation between house prices and income,and credit is far less stimulative than in the east.But as the eastern cities put tight regulation in house market,this sensitivity to credit has declined,whereas in Midwest elastic grows,reflecting the real estate speculation phenomenon transporting from the east to the middle and west.According to the theoretical analysis and empirical results,this paper reckon that,in making policies aimed at easing overheating real estate market,shadow banking should be in concern as well as bank loans to avoid speculative capital flows to overheated markets.In addition,when implementing strict limits on real estate market in the first and second-tier cities,caution should also be paid to the flow of speculative capital to the third and fourth tier cities which could cause irrational price fluctuation.