Principal Component Analysis of Influencing Factors of the Development of China's Real Estate Market

Abstract

The real estate industry has become a pillar industry of China's national economy and it is closely related to economic development. Firstly, the paper studies the influencing factors of the development of China's real estate market by principal component analysis and two principal components are extracted. Secondly, the paper studies linear relationship between the price of the real estate market and the principal component by regression analysis and makes appropriate explanations for the results. Thirdly, the paper gets the conclusion that gross domestic product (GDP), real estate development investment, completion area of the residential real estate, urban population, the money supply, residential sales area of real estate and the price of real estate are positively correlated while the exchange and the price of real estate is negatively correlated. Finally, the paper put forward some suggestions which will good for the healthy development of China's real estate.