Real Estate Price Influencing Factors Of The Empirical Analysis

With the rapid development of the Chinese economy,the real estate industry keeps growing tremendously,gradually becoming one of the pillar industries of China's economic system with a large contribution towards the gross domestic product(“GDP”)of our country,and profoundly impacting our country's economy and industrial structure.As the reconstruction of the supply side of China progresses and the development of urbanization accelerates,the real estate market begins to show a trend of price differentials based on different regional policies in various geographic areas.To explore the cause of this phenomenon is a complex economic topic that involves a multi-facet comprehensive function of many factors influencing prices in the real estate industry.The real estate industry is capital-intensive industry,which needs many financial institutions to fund it,especially for banks and other financial institutions.If the real estate price becomes too volatile,it will produce a series of social effects.It will also likely trigger a financial crisis,impacting the stability of a country's financial and social stability.The immense negative impact of a housing market grown too aggressively on the stability of the society can be seen from America's housing crash in 2008 that was caused by the housing bubble and the subprime mortgages.China's real estate price has been growing continuously for the past ten years,the trend of which remained after entering 2016.Real estate possesses general merchandise attributes whose price can be determined by factors from both supply and demand factors.Many factors can influence the supply and demand of real estate,including the macroeconomic factors and special macroeconomic regulation and control factors from government intervention.Utilizing the new residential housing as the research object,the article provides analysis on the influencing factors of the Chinese real estate price mainly from the perspective of supply and demand.This empirical research of real estate prices studies only focuses on new residential housing,while ruling out affordable housing and other special policy housing,commercial housing,and the second-hand real estate market.Four cities,Beijing,Guangzhou,Wuhan and Chongqing were used as samples.Five general factors were selected as real estate price influencers,including GDP,urban population,housing supply,loan interest rates,and the consumer price index(“CPI”).Two special factors were used,which are supply of land(i.e.size of purchased land by real estate developers)and Public finances.Monthly data of the most recent ten years was used,based on which an empirical analysis was conducted using STATA software.Based on the regression results,different price influencing factors were concluded for the different cities and regions,and reasonable advices were provided based on the different influencing factors for each region.