The Relationship Between Bank Credit And Real Estate Prices From The Point Of Supply And Demand

The stable and healthy development of the real estate industry is a colossal task. China is a developing country which is in the process of market-oriented reform. Real estate market has overcome the inequities in housing allocation in some extent by solving the housing problems plagued city residents. But rapidly rising prices have made the majority of urban households can not afford housing. The real estate market directly related to social stability, economy growth and the basic interests of the people. In recent years, especially since at the beginning of the21st century, the rising house price has attracted national attention. Since2010, the government introduced a series of regulatory policies, in order to regulate and control the high prices properly.In this paper, I make influencing factors of China’s real estate prices as an entry point, research Bank’s role in the real estate industry, and the role it should play. Firstly, banks provide loans to real estate developers who are housing providers and are an important source of funding in the real estate industry in the supply level. It could be said that the loan provided to the real estate developers directly impact on the number of real estate market supply. Secondly, bank loans are important source of funding for housing buyers in the demand level, the buyers of the real estate market can be divided into two categories:rigid demand and speculative demand. The latter demand will lead to the real estate market bubble. A large number of personal credit flow to the hands of the speculation in the real estate market, this article will prove personal consumer credit growth is the Granger cause of housing prices.The research in the relationship between the real estate development credit and real estate consumer credit and housing prices is rather few. This article focuses on both theoretical and empirical analysis to study the relationship between the real estate development credit and real estate consumer credit and housing prices.Firstly, This paper elaborated the criteria of the real estate price level, and check China’s real estate prices with these criteria. Then, analyze the main factors contributed to the rise of real estate prices in China by the supply and demand model. After that is the core content of this article:the relationship between the real estate development credit and real estate consumer credit and housing prices. Finally, I give some suggestions.