Research On The Correlation Between China's Real Estate Market And Stock Market Volatility

Since China's real estate market began to undergo market-oriented reforms in 1998,it has developed rapidly in the past 20 years and has become a commodity with investment attributes and general commodity attributes.Undoubtedly,real estate has become a pillar industry that drives China's economic growth.China established the Shanghai Stock Exchange and the Shenzhen Stock Exchange in the early 1990 s,which represents the official production of the stock market in China.After nearly 30 years of development and improvement,it has been in the financial market and economic development.More and more important.Therefore,in order to make China's economy grow healthily and rapidly,it is necessary to study the volatility correlation between these two markets.Based on the characteristics of real estate market and stock market,this paper analyzes the volatility correlation between real estate market and stock market by using portfolio combination theory,substitution effect theory,wealth effect theory and credit expansion effect theory and macroeconomic conduction theory.The transmission mechanism associated with the two markets is discussed and it is considered that there is a strong correlation between the two.On this basis,combined with the actual operation of China's real estate market and stock market,this paper analyzes the development status and shortcomings of China's real estate market and stock market,and summarizes the following characteristics: real estate prices continue to rise,and regional development is unbalanced;Market capitalization has grown rapidly and prices have fluctuated drastically.In order to further corroborate the conclusions of the above qualitative analysis,this paper selects the Shanghai Composite Index and Shenzhen Stock Exchange Index,the national real estate development industry comprehensive prosperity index and the national commercial housing average sales price as the proxy variables of the real estate market and the stock market,respectively,using 1998-2018 Monthly data,through the establishment of VAR model,using impulse response analysis,Granger causality test and cointegration test for empirical measurement analysis.The conclusions of the study show that there is a significant causal relationship between the real estate market and the stock market volatility.This remarkable relationship is characterized by long-term positive correlation;the stock market volatility is related to the relationship between real estate market volatility and stock market volatility.Play a leading role,the real estate market volatility will be positively affected by the stock market volatility to a large extent and for a long period of time,but the stock market volatility is generally negatively affected by the fluctuation of the real estate market;in the long run,China There is a relatively stable cointegration relationship between the fluctuation of the real estate market and the fluctuation of the stock market.Finally,based on the research conclusions and combining the current situation and shortcomings of the two markets,and drawing on international experience,combined with China's national conditions,put forward the policy recommendations for improving the development of China's real estate market and stock market: grasp the law of economic operation cycle and comprehensively apply various control methods;Strengthen financial supervision,improve supervision and management system;innovate the development model of the real estate market,establish a multi-level housing supply system;encourage financial development and financial innovation,develop diversified investment products;strengthen credit risk assessment and control,establish risk transmission Monitoring mechanism.