The Dynamic Relationship Between Bank Credit and Real Estate Price in China

Abstract

Real estate prices is an important indicator to measure the quality of macroeconomic, playing a vital role in national economy. The real estate market fluctuations, affects the whole macroeconomic operation, in turn, macroeconomic fluctuations, also will inevitably have a profound impact on the real estate market. The real estate market depends on financial support and, at the same time, bank credit is the main means of financial support. Bank credit not only play a crucial role to the prosperity of the real estate market, but also is a great force to promote the rapid development of the real estate market.Through theoretical analysis and empirical research, the statistical model of Chinese bank credit and the real estate price mechanism and effect is established in this paper. We select the relevant index to the studies of bank credit and real estate prices as a variable, collecting the quarterly data from 2006 to 2015, using the ADF test, Johansen co-integration test and granger test to study the dynamic relationship between price volatility and bank credit. Furthermore, we contrive to put forward relevant suggestions, making active contribution to the better advancement of real estate finance.