Abstract
The real estate industry has been in a stage of rapid development since 2000, and its pulling effect on economic growth is very significant, but it has continued to develop at a rapid pace over the years. The rising prices that follow have also had a lot of impact on all aspects of society and economy. However, a country’s macroeconomic control policy, especially monetary policy, has a very important impact on the development of the real estate industry. For example, the expansionary monetary policy since 2008 has increased the money supply, so that the real estate market investment and consumption rising, house prices accelerated. Although there are also a lot of restrictions of macroeconomic policy on the rise of house prices, the effect is not obvious. Therefore, it is necessary to make use of the policy means to regulate the real estate industry in order to achieve healthy development. This paper first analyzes the mechanism of monetary policy influencing real estate price, and then discusses the effect of monetary policy on real estate market by using empirical research method. It is found that both money supply and interest rate will have an impact on real estate price. Finally, combined with the conclusion of the analysis, some policy suggestions are put forward to improve the monetary policy system for the healthy development of the real estate industry.
Highlights
The real estate industry, as an important industry of our country’s economy and society, has the characteristics of long industrial chain, high correlation degree, wide slope and wide range
The real price of funds cannot be expressed through the loan interest rate, so the effect of interest rate on the real estate price is limited; 3) there is no causal relationship between money supply M2 and interest rate, that is, there is no influence on each other, which indicates that China’s monetary policy is independent
Through the above empirical analysis, we can find that monetary policy can control real estate prices
Summary
The real estate industry, as an important industry of our country’s economy and society, has the characteristics of long industrial chain, high correlation degree, wide slope and wide range. The transmission mechanism of monetary policy describes how monetary policy influences the real economy with the aid of monetary shock and the path on which the effect of monetary policy is implemented. It is necessary to study the transmission mechanism of monetary policy according to the change of economic situation because of the implementation and expected effect of policy system and the influence of financial market and so on. From the macro level: first, because of the wealth effect and the transmission of the industrial chain, high real estate prices may induce inflation. At the micro-level: overinflated property prices threaten residents’ residency rights
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