Research On The Effect Of Change In Rmb Real Effective Exchange Rate On China’s Real Estate Price

At present,in the context of increasing global economic and trade uncertainty,with the Federal Reserve’s continuous interest rate hikes and Sino-US trade frictions and other related factors,macroeconomic risks increase,and it is of great practical significance to explore the impact of RMB exchange rate changes on China’s housing prices.With the deepening of opening to the outside world,China’s exchange rate system and even RMB exchange rate itself influence on the housing price is increasingly prominent.RMB exchange rate can indirectly affect the price of commercial housing in China through multiple macro variables,and then affect the prosperity of China’s real estate industry.When the real estate market is affected,there are a series of chain reactions,and the upstream and downstream real estate related industries will be affected,which will affect the development of China’s economy to a certain extent.This paper first introduces the research background and research significance,and states the research content,research methods,innovation points and shortcomings.Then,this paper makes a systematic review of the relevant studies at home and abroad,and fully interprets the relevant research on the exchange rate and housing prices of the two core variables in this paper.On this basis,it further sorts out the literature from the perspective of the intermediate variables that the exchange rate affects housing prices.Next,this paper analyzes the changes of RMB exchange rate since the exchange rate reform,and then this paper analyzes the development trend of real estate related data over the years and the current development status of the real estate market combined with China’s national conditions.In a comprehensive understanding of the RMB exchange rate and the real estate market development background,this paper from five channels to discuss the RMB exchange rate changes on the real estate price mechanism,mainly for wealth effect theory,short-term international capital flow theory,money supply theory,economic growth theory and general price level theory.In terms,this paper selects the data since the exchange rate reform in 2005 to establish VAR and VECM models,and tests the influence degree of five channels that RMB exchange rate changes affect housing price.The empirical results show that China’s real estate prices are mainly strongly affected by money supply channels and economic growth channels,and are weakly affected by wealth effect channels,general price level channels and short-term international capital flow channels.Finally,this paper presents comprehensive policy improvement suggestions based on exchange rate system,real estate industry,financial innovation and industrial policy,including deepening exchange rate marketization reform,strengthening monetary policy independence,optimizing real estate supply structure,developing our housing rental market,promoting investor education,making policies to guide foreign capital into the real economy,and promoting technological innovation and industrial upgrading.The innovation of this paper mainly has three parts,first,previous scholars mostly consider the influence of the nominal exchange rate on housing prices,study the actual effective exchange rate affect less literature,but the nominal exchange rate is not adjusted by the actual price level,cannot reflect the actual value of the two currency,but the actual effective exchange rate as an important price variable,excluding the inflation on the purchasing power of currency,can better reflect the status of a country’s currency in the world economy,the real foreign value and relative purchasing power.Second,the consideration scope of this article is more comprehensive,and it can consider the impact mechanism of exchange rate on housing prices from multiple channels and multiple directions.Third,this paper puts forward the economic growth channel and the general price level channel in combination with the previous literature.Through these two channels,the RMB appreciation will have a negative impact on the housing price.