China's Real Estate Price Fluctuations In National Relations Theory And Empirical Analysis

After years of rapid development, real estate industry in China has been one of the most important supportive industries. Real estate industry is able to lead to the development of other industries from all aspects. The demand of real estate itself promotes the development of basic industries, economic growth, macroeconomic benefits and structure construction. In addition, the real estate not only enhances the development of the economy, but also provides the basic products such as house. Thus, it is a industry that is closely linked to the life of people. Since recent years, the development of real estate industry has attracted the attention of central government, local government and ordinary people. How to keep the economic growth healthily is becoming the center of the whole economy. Particular since 2002, the over hot development of real estate industry has aroused the attention of the government. The rapid growth of real estate price has been the focus. It is of significant importance to determine a reasonable price for real estate. This paper is titled "The theory and empirical research on the relationship between real estate price and macroeconomic factors.", concentrating on the relevance in gross quantity between real estate industry and national economy to reveal the rules in total quantity. The paper explains their relationships and characters. The paper is the first to explain the channels in which macroeconomic factors impact on real estate price and to stress the important role foreign reserve and Ml play in determining the price. It also puts forward the theory explanation and policy suggestions for a harmonious and healthy development of China's real estate industry and national economy.There are four parts in the paper. The contents are as follows:First chapter is introduction. Firstly, it provides the objective and research background. The paper suggests the might be reasons for the rapid increasing real estate price and analyze the investment condition of real estate. Secondly, it explains the research meaning. As a supportive industry, the development of real estate would impact on the welfare of people, progress of reformation and the development of financial market.Second chapter is theory analysis and literature explanation. Firstly, it explains the definition of real estate price and the peculiarity of the fluctuation of real estate price. Secondly, it respectively explains the factors of the supply and demand of real estate. It bases the demand analysis on macro and micro behaviors and relies supply analysis on land price and transaction cost. Finally, it explains literature.Third chapter is empirical analysis and the most important part. Firstly, it explains the characters of supply and demand of real estate market. There is great potential demand but not enough effective demand. At the same time, there is more real supply than effective supply in real estate market. Financial market of real estate can not be neglected. The over hot investment of real estate may cause bad loan in banks to increase. Secondly, it does empirical analysis on factors impacting real estate price and the channel, using monthly data from 1999 to 2005, Eviews statistic software, cointegration test and granger causality test. The empirical test result shows that foreign reserve and currency supply cause credit loan, nominal CPI and nominal economic growth, which fatherly arouse real estate price to increase.The fourth chapter is policy suggestion.