Study On The Impact Of Interest Rate Policy On Real Estate Price In China

In recent years, along with real-estate prices of our country rising generally,sustainably and rapidly, how to improve the level of the real estate marketmacroeconomic regulation has become the focus of the whole society. Realestate industry is a pillar industry of the national economy development: itsdevelopment will promote the development of relevant industries; it plays animportant role in driving economic growth. As a major means of monetarypolicy, interest rate is used more and more frequently in recent years. Especiallyunder the background of the global financial crisis, most of the countries havecut interest rates, and interest rate become the focus of attention. As acapital-intensive industry, the real estate industry is known as the "financialindustry". Because the interest rate fluctuation has obvious influence on the realestate price, the study on the impact of interest rate policy on real estate price inChina seems particularly important. This paper analyses the effect of interest policy on the real estate supplyand demand market with the theoretical, empirical and comparative analysismethod, based on return-investment analysis, Tobin Q theory, the Gordon model,and consumer behavior theory.Then we establish the theoretical model based onstock-flow model. On the basis of theoretical analysis, by collating andcollecting the annual data of interest rates and real estate prices provincial paneldata of31provinces in China from1999-2010, using the SPSS and EVIEWSsoftware, we investigate the relationship between the interest rate index and realestate prices empiricallyThrough the results of the analysis, we concluded that the impact of ourcountry’s interest rate policy on real estate prices is not significant, but theadjustment of interest rate policy has a certain effect on the real estateconstruction; the income has significant influence on real estate prices andconstruction; and with the increase of cost of development, real estate pricesalso rose, but the real estate construction doesn’t reduce. And we also concludethat the effect of interest rate policy on real estate price is regional. This paperanalyzes the reason for the difference between theoretical research and empirical research and why the influence of the interest rate policy on real estate price isnot obvious. Then we put forward the corresponding policy and suggestions.