Housing Price Deviation And Its Spillover Effect From The Yangtze River Delta Region Cities

In this paper,we test empirically whether the actual housing prices have deviated from which determined by economic fundamentals in cities of the Yangtze River Delta region,in view of housing price deviation.We analyze the factors affecting the housing prices in the Yangtze River Delta region cities,and discuss the determined influences of various economic fundamental factors on housing prices,using the panel fixed effect estimation and system GMM method by establishing a fundamental housing price model.Then,we use the model to estimate the fundamental housing prices and non-fundamental prices in the Yangtze River Delta region cities from 2005 to 2013,obtaining the rates of deviation.On this basis,we further reveal the spillover effects and paths of housing price deviations in the Yangtze River Delta region cities,by introducing the vector auto-regression model and impulse response function.The empirical results show that the fundamental factors can basically explain the change of housing prices in the Yangtze River Delta region cities,between which there are differences in time and space.The rates of deviation have had a greater degree of change from 2009,and the economic fundamentals have become unable to explain the actual housing prices reasonably,with the extent of which are more and more serious.The study also finds that the spillover effects between fundamental housing prices are two-way,with the strength is relatively balanced.The spillover paths between non-fundamental housing prices are also two-way,but the strength of them is unbalanced,in which the impact from Shanghai on the other core cities has longer duration and larger relative intensity.In addition,the core cities does have spillover effects on non-core cities in the Yangtze River Delta region,in which the deviation of housing prices in Shanghai changes firstly,then driving the housing prices deviations in other cities to change.We advise that the government can take the ideal of differentiated policy to control the housing market in the Yangtze River Delta region,in order to achieve the effects of regional different treatment and urban classified guidance.From the empirical results,the fundamental housing price model used in this paper can explain the housing prices to some extent in the Yangtze River Delta region cities,with the hypotheses we propose have been well tested.However,we also find that the method using the fundamental model to estimate housing price deviations has some shortcomings,such as the subjectivity of selecting the explanatory variables,impacting the accuracy and the effectiveness of estimated results.