Research On The Spillover Effect Of Urban Housing Price In China

The real estate industry is a capital-intensive and highly-connected industry, and also a basic industry to provide the necessities of life. Changes in housing prices are concerned by the government and residents, then have become a hot topic of research scholars. Scholars have studied many kinds of factors that affect the housing price changes from different angles, in recent years, spatial connections of housing prices have attracted more and more interests. This paper have first construct a mathematical model of housing prices spill effects based on the expectation theory, then used spatial analysis techniques to empirically prove spillover effects, furthermore examined the structural break of housing prices spillover effects , finally studied the mean spillover effect of housing price changes and the transmission routes of risk spillovers. The main conclusions are as follows:1. It is found that the housing prices changes of 35 large and medium cities have significantly positive spatial correlations, which would decrease with the increase of distance between the cities. The spatial correlations would increase over time.2. The empirical results of spatial dynamic panel model of housing price changes show that housing prices' lag term, housing prices' space term and housing prices' spatial lag term have a significant impact on housing prices: the urban housing price changes of last period will negatively impact local cities' current housing prices, other cities' current housing prices have a positive impact on the current urban housing prices, urban housing prices will have the strongest impact among cities within 2000 km and 3000 km, when the distance between cities increases, the increase of other cities' housing prices of last period will lead to a significant increase of the local cities' current housing prices, meanwhile without consideration of distance, there would be the strongest influence,which illustrates that with controlling other factors , housing prices of China's 35 large and medium cities have spillover effects.3. 13 of the 35 cities are proved to have a significant and stable spillover effect of housing prices changes, and the remaining 22 cities also have been found a spillover effect of housing price changes, but there has been a structural break. The structural break occurred mainly between January 2007 and January 2009, which also saw the outbreak of the financial crisis, indicating that the financial crisis could bring about the structural break of the spillover effects of urban housing prices.4. It is found that there is a significant mean spillover effect of housing price changes between the major cities of each economic region, but it is asymmetric. Cities with the high level of economic development may occupy the relative "dominant" position,on the contrary cities with low level of economic development would been more susceptible to other cities.The maximum impact on urban housing price volatility is not necessarily from its own, but may be derived from the price fluctuations of other cities in the region. Meanwhile, the degree of spillover is not only related to the spatial distance between the two cities, but also been affected by other factors of the economic development gap.5. It is found that there is a significant risk spillover effect between major cities' housing market in each economic region. Cities with low or unbalanced level of economic development would suffer high risk spillover of urban housing market more widely. In the regions with unbalanced level of economic development, citied with high level of the economic development is more likely to spill housing price risk to other cities, and those with low level of economic development is more vulnerable to others.Finally, this paper gives a series of suggestions for the development and regulation of China's real estate market.