The Empirical Analysis Of The Regulatory Effect Of Changes Of The Interest Rates On The Estate Prices

The industry of the real estate is the basic industry of our economy, the well development of which is essential to construction of people’s livelihood and continuous development of economy. But there are many problems in our real estate market, so it is necessary to research the corresponding regulating policies. As an important part of financial regulating policies,whether interest rates policy is effective to control the price of the real estate,in the other words,the relationship of the fluctuation between the interest rates and the real estate price,should be expounded an proved from two aspect:one is the theoretical analysis, the other is the testifying with statistics.In view of the consumptive attribute and the capital attribute to the real estate, there is an theoretical analysis for the effect of changes of the interest rates on demand for the real estate--including consumption demand and speculative demand, and supply for the real estate is based on theories of consumer behavior,assets pricing models and etc, the conclusions of which indicate that changes of interest rates will affect the demand and the supply in real estate market at the same time, and the rising of interest rate will lower the demand and the supply,causing the decrease of equilibrium output of real estate market,but uncertain changes of equilibrium price which finally depends on the compared elasticity of demand and supply to the interest rates.And after comparison between descriptive trend graphs of real interest rates and the real estate price during a period from the year of2006to2010, it can be founded that their fluctuant tends are generally reverse, which is corresponding with theoretical analysis.In the testifying part, real interest rates are divided into three types according to terms, including negative rate, real interest rate for one to three years and for at least five years. Based on VECM model built to research on the relationship between real rates and real estate price,several conclusion are included:(1) There exists a cointegration relationship between those real rates and real estate price in a long term, the elasticity of real estate price to the real rates for at least five years is the largest, but even this kind of change effect is not obvious;(2) sustaining negative rate can cause a rising trend of real estate price;(3) changes of real interest rates can only explain a small part of fluctuation of real estate price;(4) market expectation mechanism is obvious in our country. In conclusion, the adjustment of interest rates has a effect on the real estate price, but very limited.Considering the limited effect of interest rates tools on regulating the real estate, smoothing the financial price mechanism in the real estate market and strengthening cooperation between relevant policies to relieve the contradiction between demand and supply can be helpful for promoting the effectiveness.