Abstract
Nowadays, the real estate prices in China have shown a continuous upward trend. Prices in the first-tier cities such as the north and the Guangzhou-Shenzhen are getting higher and higher, and ordinary people are becoming increasingly unaffordable. High housing prices have not only put pressure on people’s lives but also have had many adverse effects on China’s economic development. Many scholars at home and abroad think that the continuous rise of house prices is closely related to the flow of international short-term capital. International short-term capital when entering the Chinese market, because of its speculative easy to create a bubble, bringing huge risks. Through theoretical and empirical research, this paper analyzes whether the international short-term capital flows have an impact on house prices. Finally, it concludes that the inflow of international short-term funds to the real estate market in China has a positive impact on the real estate market in China, and to a certain extent, has promoted the real estate prices. The entry and exit of hot money have a great volatility effect on the real estate market, which has a great impact on the long-term, healthy and stable development of China’s real estate market.
Highlights
Tan Xiaofen and Lin Tianyu (2013) [8] based on the vector autoregression (VAR) model Granger causality test and cointegration test, the analysis found that the “liquidity effect” triggered by hot money inflow can affect real estate prices in the short term
The entry and exit of hot money has led to the volatility effect in the real estate market, which has a great impact on the long-term, healthy and stable development of the real estate market in China
Due to its own characteristics, speculative property and big profits, the real estate industry has become the key target of international short-term capital entering and exiting, which is the target of the international hot money speculation
Summary
At the present day of economic globalization, the scope of international capital flow is constantly expanding, and its active presence is visible in all markets. Since 2000, short-term international capital has frequently moved in and out of China and its scale has risen rapidly, affecting China’s economic market and economic and industrial development. As a pillar industry of national economy, the real estate industry has always been the focus of international short-term capital flows because of its high profits, strong speculative and so on. The real estate prices in China have shown a continuous upward trend. Many scholars at home and abroad think that the continuous rise of house prices is closely related to the flow of international short-term capital. Through theoretical and empirical research, this paper analyzes whether international short-term capital flows have an impact on housing prices and draws conclusions based on empirical analysis, which is of great significance to the healthy operation of China’s economy
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