Abstract
This paper examines whether the broad money supply (M2) and the interest rate as two monetary policy tools will have different effects on housing prices. A sample of 10 listed real estate companies was analysed using panel vector autoregression (PVAR) models, using data from 2007 to 2020. The empirical results show that there is a correlation between housing prices and M2 in the short term, which is even more obvious in the medium term. Overall, M2 has a positive impact on house prices. On the other hand, the three-year loan rate has no significant impact on housing prices in the short term, but has a negative impact on housing prices in the long term. After the pulse response analysis, the money supply has a more significant impact than the interest rate on the real estate price, and has a better effect in controlling the housing price. The research results contribute to the scientific formulation of monetary policy and the reasonable control of the market.
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