Real Estate Investment And Regional Economic Growth

Consumption, exports and investment are the three main drivingforce for economic growth, but since the financial crisis of2008,sluggish domestic demand and social consumption withering away,have made the role in promoting economic weakening; while exportsaffected by the global macro economic downturn would be difficult tostimulate economic growth. In this case, the investment will becomethe main means in China to promote the development of economy inthe past few years. The real estate industry can not only absorb alarge number of investments, but also effectively promote theurbanization construction. Thus, in a fairly long period of time, thereal estate investment has been used as the main engine of economicgrowth. In recent years, a large number of social capital in the pursuitof high returns and the influx of real estate market, has made the realestate industry the most beautiful. While a huge amount of real estateinvestments pulling GDP growth and accelerating urbanizationeffectively, they also have caused abnormally high prices, localgovernment debt, the irrational economic structure, and many otherproblems. It can be said that the real estate market affectsthe macro economy, and it intertwines with the people’s emotions.Therefore, the study systematically investigated the relationship between investment and economic growth in the real estate has acertain theoretical and practical significance.The real estate industry for economic and social development isgood or bad has always been a controversial topic. From the nationalmacro level, the dominant view in recent years has gone from afanatical pursuit to calm reflection process. For the understanding ofrelying on real estate investment to promote economic developmentfrom the initial benefit is more than fraud becomes more harm thangood. But it should be a concrete analysis of concrete problems,because of significant differences in regional characteristics and thereal estate market in our region’s economy, making the relevance andimpact of real estate and economic growth in the community mustalso be different. If a certain area, the real estate investment can stilleffectively stimulate economic growth, to continue to increaseinvestment in real estate is not unavailable; however, if the real estateinvestment to promote the inefficiency of economic development,even harmful, we have to speed up economic restructuring graduallyto reduce the investment in real estate. Therefore, for differentregions, we need to study different for different situations. Shandongprovince is one of the most developed provinces in China, since2007,it has been ranked the top three nationwide. The rapid economicgrowth of Shandong province in addition to benefit from the reformand opening up policy and the adjacent Japan and South Korealocation advantage, also depends on a variety of pillar industries. Thereal estate industry is one of the important pillar industries inShandong province.This paper first describes the status quo situation in real estate investment and economic development in Shandong Province fromthe macro, and then select the1990-2013real estate investmentvolume of Shandong Province and macroeconomic data as the testsample, and then use a variety of measurement methods such asCointegration test to examine the impact of real estate investment toeconomic growth in Shandong Province. The results showed that, thereal estate investment can spur economic growth, and there is along-term stable equilibrium relationship between the two. In theshort term, the real estate investment for each additional1%, GDPincreased by about0.11902%; while the long term, real estateinvestment for each additional1%, GDP increased numbers promotedto0.59%. Real estate investment stimulating long-term economicgrowth is more significant than the short-term. Thus, the real estateinvestment in Shandong Province can really stimulate economicgrowth, but the efficiency of pulling has weakened, the real estateinvestment is not suitable to continue to stimulate the economy asthe main force. In addition, the economic system has strong selfadjustment function, and it can spontaneously maintain balanced. Ifshort-term fluctuation occasionally deviates from the long-runequilibrium, this deviation won’t last, and won’t aggravate. Theeconomic system will gradually play its convergence mechanism,with each cycle (0.349653) of the adjustment effort, to continue torectify the deviation, until its return to the equilibrium state. In viewof this, combined with the practical problems of the real estateindustry of Shandong Province, we finally put forward targeted policyrecommendations.