Research On The Influence Of Industry Agglomeration On Housing Price

Since the reform and opening-up,the sales price of the commercial house in China is rising rapidly.However,these two years have witnessed a tendency of “cooling down” in the real estate market.Most scholars probe into the changing real estate price from the perspective of demand and supply,while only a few of them extend their research into the industry factors behind the changing price.Therefore,this paper tries to discuss the following issues.Firstly,how does secondary industry agglomeration degree affect the housing price? Secondly,if there is any effect,will it be different in different areas? At last,how does the sophistication of industry structure influence the housing price?This paper selects the data in between 2005 and 2016 from 74 counties and cities in Zhejiang Province,and tries to build a mixed effect regression model so as to assess how the agglomeration degree of the secondary industry influences the selling price of commercial house with instrumental variable estimation method.Here comes the conclusion:(1)A regression analysis of the overall sample discovers that,in general,agglomeration degree of the secondary industry is an important factor to the changing price of real estate price and at the initial stage when the industry assembles the price will rise.However,when the aggregation level exceeds a certain critical value,the aggregation will in turn has a negative impact on the price,which means that the agglomeration degree and the price will come out as an up-side down U-shaped relationship.(2)A classification study of the samples discovers that in 51 coastal counties and cities,the agglomeration degree and the housing price relationship appear as an up-side down U-shape.But 23 inlands counties and cities show a lack of relevance between the agglomeration degree and the housing price.(3)A further study on the overall samples of Zhejiang Province finds out that the sophistication of industry structure,or the output value between the tertiary industry and the secondary industry emerges as a positive correlation.The housing price will rise with the rising ratio of the tertiary industry and the secondary industry.Besides,same conclusion can be made in either coastal or inlands areas.The above research results help to offer some advice to the local government on regulating the housing price.Firstly,when decision makers try to work out measures on regulating the housing price,they need to consider comprehensively into factors like the rationalization of industry agglomeration degree and the optimizing of the industry structure.Secondly,avoid “one size fits all” when making decisions and adopt policies according to the local conditions.