Real Estate Investment Expanded Role In Boosting Inflation

The analysis on pulling effect of expansion of real estate investment to inflationReal estate industry is the pillar industry of national economy, it is especially important to promote social and economic development and improve the living standards. But the expansion of real estate investment also leads to inflation.On the basis of summarizing the relevant research from home and abroad, this paper introduces the current situation of expansion of real estate investment in our country. And it analyzes the main reason of expansion of real estate investment, such as the interest rates of banks keep low for a long time, a large number of foreign speculative capitals flowing to real estate that result from continuous appreciation of RMB, government's strongly stimulation of domestic demands stimulates the housing consumption, excessively lax policies of housing consumption loan, and the deficiency of government land management policies and so on.This paper introduces the principle of expansion of real estate investment stimulating inflation. It analyzes the path of how to induce inflation by expansion of real estate investment. It also has an empirical test on the case of expansion of real estate investment inducing inflation. And then it proposes some policy recommendations. The first one is controlling the structure of land supply by implementing national land management system strictly, controlling the supply of housing land, and establishing reasonable land selling prices; the second one is controlling the excessive growth of investment in real estate development through the tight interest rate policy; and the last one is controlling expansion of real estate, and then inhibiting inflation.