Research On The Local Governments Behaviors And Real Estate Market Volatility Under Uncertainty

The real estate market volatility in China is largely influenced by the government's macro-control behavior.Among them,the intervention of local governments in the real estate market can be mainly divided into land supply in the land market and transaction restrictions in the housing market.Under uncertain market,local government interventions in the real estate market will undergo more complex decision-making processes and will have a more unpredictable impact on price fluctuations in the real estate market.Therefore,this thesis discusses the decision-making process and the influence mechanism of the intervention behavior of the local government's real estate market under uncertainty from the aspects of land supply and transaction restrictions.In terms of land supply,this thesis analyzes the influence mechanism of market uncertainty on local government land supply behavior by establishing a dual incentive model of economic performance and market supervision.Based on China's 30 provinces' land leasing panel data from 2004 to 2014,this thesis also introduces a threshold model and finds that land leasing is affected by both local governments' economic performance and the market volatility;further,their impacts are asymmetric depending on the market volatility.To be specific,under low market volatility,local governments would lease less land in order to gain more land leasing income from increasing housing price to improve their economic performance,while under high market volatility,local governments would lease more land to improve the economic performance when maintaining stable housing price at the same time.In terms of transaction restrictions,this thesis analyzes the residents' heterogeneous expectations of home purchase restriction policy and the evolution their expectations under uncertain environment.Based on the stock adjustment model,the thesis models the price dynamics by considering the heterogeneous expectations and policy uncertainty under the home purchase restriction.The results of numerical simulations and empirical tests in this thesis show that residents' speculation behavior and policy uncertainty will exacerbate the price fluctuations caused by the shocks of purchase restriction through the channel of expectation.It is found that speculation tends to increase the influence of policy uncertainty on house price fluctuations and further differentiate house price changes in different sub-markets.Moreover,policy uncertainty will exacerbate real estate price volatility by affecting residents' heterogeneous expectations.The thesis also finds that there exists long-term and short-term heterogeneity in the impact of uncertainty on the policy effect of the home purchase restriction.From the perspective of uncertainty,this thesis thoroughly studies the decision-making process and influence mechanism of local governments' land supply and transaction restriction behaviors,which could provide theoretical and empirical supports on the supply-side structural reforms in the land sector,and the effectiveness of regulatory policies by considering and guiding residents' expectations.