The Relationship Between Residents' Income And Rising Housing Prices

Since the reform and opening up,with the continuous development of China's economy,the real estate market has entered a stage of rapid development,and the real estate industry has gradually become a pillar industry of China's economic development.But in recent years,the rapid growth of housing prices has exceeded the growth of residents'income,resulting in a decline in the support of residents'income on housing prices,and a series of problems in the real estate industry such as excessively high house-to-income ratio and excessive investment in the real estate market.This situation has affected the healthy development of our country's economy.In the long run,the rise in housing prices is an inevitable trend due to some factors such as the improvement of housing quality and the living environment,and the growth of residents' income.But,whether economic growth and the growth rate of residents' income can support the increase in housing prices,is worth studying.Based on previous research results,this paper makes a theoretical analysis of the relationship between residents' income and house prices using Friedman's Permanent Income Hypothesis.Then the VAR model is established to carry out an empirical analysis,and the conclusion is that in the four influencing factors of residents'income,money supply,real estate investment and consumer price index,the positive impact of residents' income on housing prices is the most significant.Finally,taking the comparison of Shenzhen and San Jose as an example,this paper makes an analysis of residents' income,housing prices and the internal factor that affects residents'income:industrial structure.Striving to provide some policy recommendations for the development of China's real estate industry and the optimization and upgrading of industrial structure.The conclusions of this paper are as follows:First,residents' income has a significant impact on housing prices,and the industrial structure directly affects residents' income.Therefore,the impact of industrial structure on housing prices is very important.Secondly,at present,Shenzhen's industrial structure is far less than that of San Jose,and residents' income of Shenzhen is far behind San Jose,so Shenzhen's support for housing prices is not strong in San Jose.However,housing prices in Shenzhen have surpassed San Jose.The current situation is not conducive to the stability of the real estate market in Shenzhen.Although this is an individual case,it has some certain representativeness.Therefore,it is necessary for our country to adjust the policy in order to maintain the healthy and stable development of the real estate market and China's economy.