Research On The Impact Of Irrational Expectations On Housing Price Fluctuations

In recent years,the large fluctuation of housing price has caused wide concern of the society.With the elimination of the physical distribution of housing for urban residents,China is gradually moving towards the road of housing commercialization,and the real estate industry is playing a prominent role in the development of the national economy.The consensus among economists is that house prices fluctuate up and down over a long period of time based on economic fundamentals,around their intrinsic value changes.But watch China's house prices in recent years,basic in a unilateral rise,on the one hand,economic growth continuously downward,population and income growth slowing,many cities face a severe real estate to inventory pressure,on the other hand,the central and local government introduced gradually,real estate regulation policy inhibiting excessive growth,but it still can't stop China's large and medium-sized cities housing prices continued to rise.House prices suggests that,in addition to economic fundamentals and the impact of government regulation,in promoting the irrational expectations of price rises plays an important role,especially in the process of house price rising,enlarge investors bullish forecast for house prices and housing demand,and impact on house price fluctuations.It is of great theoretical and practical significance to study the influence of irrational expectation on the fluctuation of housing price.On one hand,investors to buy houses in fighting inflation and asset value demand,real estate financial property of growing demands in the process of discuss prices wave pay more attention to the influence of irrational factors such as expected.on the other hand,not only unfavorable to the entity economy development,more play the financial risks,the irrational expectations impact on house price fluctuations help the government to adjust the real estate regulation and control way of thinking,from the lead investor expectations of stable prices,to defuse financial risks,promote sustainable development of the economic health of lay the foundation.This paper analyzes the theoretical mechanism of the influence of irrational expectation on the fluctuation of housing price.First,the paper based on the formation mechanism of irrational expectations,as well as expected the main body and regional information asymmetry of the existence of basic facts,put forward the irrational expectations at the individual and the area between the existence of transmission mechanism,individual and small range of irrational expectations easy for transmission and diffusion into the overall,many areas of irrational expectations;Second,the irrational expectations by acting on real estate's supply and demand,affect house prices,the paper based on the basic principle of price decision,analysis of the real estate market participation main body,and buyers and real estate developers in the irrational expectations under the premise of consistency or not,affect the real estate market supply and demand and price.Paper use 35 large and medium-sized cities in China(including 27 provincial cities,4 municipalities directly under the central government and 4 cities under separate state planning)as the research object,the irrational expectations influence house price fluctuations are empirically tested.Beyond the first form of push type expected to measure of irrational expectations,then using the panel data model to examine the influence of irrational expectations on house price fluctuations,in the analysis of the concrete model,respectively from the Angle of time dimension and space more irrational expectations impact on house price fluctuations may exist difference and the estimated results tested for robustness.Paper draws the following conclusions: Firstly,irrational expectations have a significant impact on house price volatility.In the full sample estimate,for every 1% increase in the expected house price,the house price in the current period fluctuates up by 0.4768%,which indicates that irrational expectations play a significant role in influencing the fluctuation of house price.Secondly,from the time and space dimensions,there is a difference in the intensity of the impact of irrational expectations on housing price volatility.Period of time to see,house prices rise,the greater the irrational expectations the greater impact on housing prices,points area,the higher the level of economic development,the higher the prices of the city,the influence of irrational expectations on prices it;Thirdly,in terms of economic fundamentals,demand has an important impact on house price volatility.From the perspective of supply and demand relationship,the population and income factors that represent demand have a significantly greater impact on housing price than the cost factors such as land price and construction price.Fourthly,interest rates are playing an increasingly important role in influencing house prices.Paper puts forward the following policy Suggestions: Firstly,strengthen the management of irrational expectations in the real estate market.Specific measures,on the one hand,through technical and statistical method,real-time monitoring market forecasts development trends,as the government was aware of the real estate market and the important basis of corresponding regulation policies;On the other hand,we will improve the construction of information platform for the real estate market,intensify information disclosure,reduce information asymmetry and help the market form rational expectations.Secondly,according to the prices and the economic development level,the differential control measures are taken,the house price growth is too fast,and the economic foundation is weak city to further strengthening the management of real estate regulation and expectations;Thirdly,to strengthen the construction of affordable housing,commercial housing market demand shock,through increasing affordable housing supply,reduce the commercial housing market demand,reduce the prices by the rigid excess demand helped spike;Fourthly,we should attach importance to the impact of interest rates on housing price volatility and strengthen policy coordination.