Abstract
This paper uses the classical and easy-to-understand Vector Auto-regression Model Method to study the impact of economic and monetary policy variables on the residential property market in Macau. By using sample monthly data from Jan. 2005 to May 2021, the empirical results show the dynamic relationship among the residential property value, key economic and monetary variables. Furthermore, adopting the Granger causality test, generalized impulse response function, variance decomposition and co-integration test of the corresponding VAR specification, the tables and graphs clearly explain the residential housing value has a positive relationship with the gambling gross income; it has a negative relationship with the unemployment rate; it has a positive relationship with the money supply; it has a negative relationship with the consumer price index. Finally, this paper gives five policy actions to help government stabilize the residential property market in Macau and make it healthy develop.
Highlights
The full name of Macau Special Administrative Region of the People’s Republic of China is one of the core cities of the Guangdong-Hong Kong-Macau Greater Bay Area
Adopting the Granger causality test, generalized impulse response function, variance decomposition and co-integration test of the corresponding VAR specification, the tables and graphs clearly explain the residential housing value has a positive relationship with the gambling gross income; it has a negative relationship with the unemployment rate; it has a positive relationship with the money supply; it has a negative relationship with the consumer price index
These factors work together to promote the red-hot real estate market in Macau and cause the housing price of Macau to soar to the ground
Summary
The full name of Macau Special Administrative Region of the People’s Republic of China is one of the core cities of the Guangdong-Hong Kong-Macau Greater Bay Area. The per capita GDP is MOP661,000 in the year 2019 and rapid economic development is among the top three in the world. These data sources come from the Statistics and Census Service (DSEC). Many factors work together to make the value of land resources in Macau, the value of houses and buildings and the value of people’s investment in labor extremely high. These factors work together to promote the red-hot real estate market in Macau and cause the housing price of Macau to soar to the ground
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