China Sales And Existing Home: An Empirical Study Of Relationship Between The Market Price And Influence Factors

The existing literatures have done much meaningful work in reaserching China housing price’s effect factors and volatility rules. But the resaerch of China presale and spot market has been largely ignored for a long time. The information of the relationship between presale and spot market is important for the investers to make their arbitrage, and the understanding of spot and presale markets’respectively impact factors is essential for the regulators making proper regulatory policies. Therefore, we tried to identify the relationship between spot and presale real estate of China, and find the seperative effecting factors of the two markets.Firstly, using the experiences of financial market’s research, this paper adopts VECM model to research price lead-lag relationship between presale and spot real estate market in China. By testing both the short-run and long-run Granger casualty relationship, the results indicate that there’s a bilateral price lead-lag relationship between Chinese presale and spot property market. The outcomes of VECM models demonstrate that presale real estate market plays a greater role in the property price discovery process in China.Secondly, we reaserched the volatility of presale and spot real estate market with EGARCH model, and tested the volatility spillover effect between presale and spot real estate market with BEKK-GARCH model. The empirical results of EGAECH model indicate that, both the spot housing price and presale housing price are time varying, and have volatility clustering effect, volatility persisting effect, but no volatility asymmetric effect. The results of BEKK-GARCH demenstrate that there’s no significant volatility spillover effect between China spot and presale markets.Finally, we researched the influencing factors of spot housing price and presale housing price with the step-wise regression method. The outcomes indicate that the main influencing factors of spot housing price are:housing suply, housing demand, land supply, disposable income of urban households, employee in urban area, land price, price of major materials in building installation, bank load, mortgage interest, and lagging spot housing price. The main influencing factors of presale housing price are: housing demand, land supply, land price, bank load, mortgage interest, and lagging presale housing price.