The Influence Of China's Interest Rate Policy On Regional Reduction Of The Real Estate Inventory Empirical Research Based On Demand And Supply

The reduction of the inventory of real estate has been considered as one of the most important objects in the supply-side reform by Chinese central government.The reason is the amount of China' s real estate inventory has reached a highest record in history in 2015,which affects not only the industry of the real estate and relevant industries,but also the stability of financial system.To reduce the backlog of real estate,the central government has lowered the interest rate and deposit reserve rate,reduced the first payment of personal housing loan and tax of transaction.These policies have remarkable achievements,however,because of the disequilibrium of economic development,the policies' effects do not achieve government's goal.Some cities' real estate markets in the Eastern China become more prosperous,and the asset price booms.It seems that in such areas it is unnecessary to promote the inventory reduction which is referred as "destocking" for short,but it does not happen in other underdeveloped regions.Usually monetary policy plays a vital role in"pricing",not in "destocking".It is innovative to analyze the influence of monetary policies in "destocking".The current target is different from the past.In order to analyze the pratical effect of national monetary policy on real estate inventory and the reasons why the interest rate policy failed to achieve the goal,this paper dwells upon the monetary policy 's effects on the real estate inventory and the regional differences from demand and supply,based on the theories of supply and demand,housing and monetary transmission mechanism and the monetary regional effects.This paper utilizes panel data to establish a real estate demand and supply regression model,which the data are divided into three areas.Through building a demand-supply model,the relation between interest rate and demand-supply will be analyzed.The regression results indicate that,interest rates and the demand for real estate are inversely relevant in national scale and in the middle-area,however,there is a time lag and the influence is non-linear.From the point of supply,the interest rates'effect is regional significantly,when using different explanatory variables refer to the supply,the results of the regression are not the same.That means the effect of monetary policy is complicated.There is also a time lag and the influence is non-linear.Integrated the regression results of demand and supply,it's reasonable to use "commercial housing area for sale" as the representative of the real estate stocks.The regression results of the real estate stocks indicate that,the impact of interest rate on overall real estate stocks is inverted u-shaped.Under the current level of interest rates,interest rates and the real estate stocks is positive correlation,which confirms the effectiveness of the reduction of interest rate.When it comes to other factors which influence the real estate demand and supply,the domestic loans' influence on the supply is significant.It proves that the development of the real estate market highly depends on the financial support.When the price of real estate goes up,the demand will reduce and the supply will be stimulated,and the inventory will get worse.