Abstract
Based on the disequilibrium theory, the paper measured the market efficiency of housing market in China from 1998 to 2013 by constructing the econometric model. The proposed methods and model can solve the problem of how to quantize the market efficiency in a disequilibrium market, which will sever the purpose for indicating the market status and improving the market operation. The results showed that: during 1998 and 2013, Chinese housing market had been in a state of disequilibrium, and housing market efficiency was high and on the rise, which showed that Chinese macroeconomic regulation against real estate played an important role.
Highlights
In the past few years, housing vacancy rate in China was high
(2) From 1998 to 2003, “E” had been in decline and the possible reason was at the beginning of the market-oriented operation, the institution related with the real estate was imperfect and economic actors had not adapt to the market, so that all kinds of market trading friction led to a decline in market efficiency
(3) From 2004 to 2007, housing market efficiency E had been in a rising trend and reason may be that after years of market-oriented operation in commercial housing market, the economic actors gradually explored the law of the real estate market operation, at the same time, various system were constantly improved, which led to reducing trade friction and improving the market efficiency
Summary
In the past few years, housing vacancy rate in China was high. The entire housing vacancy rate in Chinese urban was 22.4% in 2013 reported by Chinese family financial investigation and research center in the Southwestern University of Finance and Economics. According to the basic principles of economics, the high housing vacancy rate in China reflects that the housing supply greatly exceeds the demand and the house prices should fall. According to the definition (Benassy, 1987) that market efficiency refers to all mutually beneficial transactions can be completed in the market operation. This is known as there is no friction in the market [2]. This paper attempts to measure the size of the market efficiency from the perspective of market disequilibrium, which will show how much the real estate market in China meets the “short edge rule”
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