An Analysis Of Housing Price Determinants And Housing Market In Shanghai, China

The purpose of this study is to attempts to build a model structure helping predict the housing price of Shanghai City, China. This study analyzed real estate price determinant in Shanghai with time series data based on previous researches related to real estate price determinant analysis. Previous researches reflected characteristics of Korea and this study reflects characteristics of China, especially Shanghai.General discussion has been started first for the market of real estate for housing in Shanghai. Shanghai is the central city of Chinese economy. Real estate market in Shanghai develops constantly along with development of urban economy to play a role of an anemoscope of Chinese real estate market. The real estate market in Shanghai achieved rapid growth for10years from1998to2007. Demand of the high-income bracket for basic housing was satisfied in this period. Fastest increasing of housing price became beyond consumption capability of the middle-income bracket which is the demand of housing in2004. This resulted in loss of price support capability of the market later. This phenomenon kept increasing in the middle of subprime mortgage crisis in U.S.A. In the beginning of2008, Chinese government’s macro-control to restrain the market overheating due to excessive liquidity and investor sentiment after the Olympic Games in Beijing yielded rapid reduction of the market.To determine the actual factors of change in housing price, performed an empirical analysis with housing price, housing supply area, construction loans, CPI, domestic consumption, disposal Income, and liquidity index (M1, M2, Mortgage, and Shanghai Stock Price Index) of with three years data from January2006to December2008ADF(Augmented Dickey-Fuller) and PP(Philips-Perron) test done in advance to discriminate among selected macroeconomic indices whether it is stable or not. After that the indices used as variables for cointegration test to identify a long term equilibrium between variables and hosing price.Findings in this paper are as follows;First, stocks and housing are not recognized as alternative investment. Second, the proper index as the liquidity index is the total currency (M2). Third, in case of Shanghai, domestic consumption and real estate price have positive correlation each other.Fourth, housing market in Shanghai did not show to have such positive correlation as a general relation between supply and price in housing market.JEL Classification:...