Research On The Impact Of RMB Exchange Rate On Residential Sales Prices In First Tier Cities

With the marketization of the RMB exchange rate system,the RMB exchange rate has shown stronger volatility.At the same time,the upward trend of residential sales prices in China has also shown a turning point at present.Based on the current domestic and international environment,the RMB exchange rate will become an important indicator for measuring macroeconomic performance.Its fluctuations will have a significant impact on the country’s money supply and international capital inflows,thereby impacting residential sales prices.Therefore,it is necessary to further study the relationship between the RMB exchange rate and residential sales prices.At present,many studies only focus on the relationship between exchange rates and national real estate prices,neglecting that different levels of economic development between cities can also lead to differences in research results.Meanwhile,due to the high sales prices of residential properties in first tier cities,any fluctuations will have a greater impact on the economy.Therefore,analyzing the impact of the RMB exchange rate on residential sales prices in first tier cities helps to clarify the root causes of the problem,and has very important practical significance for first tier cities to cope with external shocks and prevent economic risks.This article first combines relevant classic theories to sort out the impact path of the RMB exchange rate on residential sales prices.Then,it analyzes international cases where the exchange rate affects asset prices,and summarizes in detail the evolution process of China’s policies on exchange rate and housing.On this basis,an analysis was conducted on the current situation of the housing market in first tier cities,and inferences were drawn based on the characteristics of first tier cities in China.In order to verify the inference,this article establishes a VAR model and analyzes the data through econometric methods such as cointegration test,Granger causality test,impulse response analysis,and variance decomposition analysis,to empirically examine the impact of the RMB exchange rate on the sales price of residential properties in first tier cities.The research results indicate that from the perspective of interrelationships,the depreciation of the RMB will be accompanied by an increase in residential sales prices in first tier cities and a decrease in residential sales prices in underdeveloped cities.This result may be related to investors’ expectations of local residential appreciation.From the perspective of explanatory power,the real exchange rate of the RMB has a stronger explanatory power on the sales prices of residential properties in first tier cities than in underdeveloped cities.From the perspective of transmission path,in Shanghai and Shenzhen,the real exchange rate of the RMB affects residential sales prices more through the transmission path of short-term capital inflows,while in Beijing and Guangzhou,the real exchange rate of the RMB affects residential sales prices more through the transmission path of money supply.Empirical evidence has shown that the fluctuation of the RMB exchange rate has a deeper impact on the sales prices of residential properties in first tier cities,and there are differences in intensity and transmission paths between cities.In the new situation of comprehensively deepening reform and continuously expanding opening up to the outside world,this study provides ideas for maintaining the stable development of the housing market in first tier cities.