Non-equilibrium Degree of Real Estate Market and Government Intervention Timing: Based on the Non-equilibrium Model and the Short——side Rules in Shanghai Real Estate Market
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In this paper,we analyzed the non-equilibrium of Shanghai's real estate market by the non-equilibrium model and the short-side rule hyperbolic aggregation equation based on the time series data of 1993- 2011. The paper Estimated the degree of non-equilibrium of the real estate market. And based on non-equilibrium degree,we analyzed of the timing of Shanghai's government intervention of real estate market. The results showed that: Shanghai's real estate market has long been the existence of effective demand and supply of non-equilibrium state. The effective demand and effective supply of the real estate market had positive correlation with per capita disposable income of urban households and the proportion of urban population. And there is noHerding phenomenon in Shanghai's real estate market. Non-equilibrium degree of the real estate market is an important index of government intervention in the market. Government should sdjust the imbalance of supply and demand of the real estate market by flexible intervention policies. So as to promote the real estate market return to equilibrium and ensure the health and steady growth of the real estate market.Keywords:
Economic interventionism
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This paper,from such aspects as macroscopic factor,relations between and supply demand and other factors,analyses the risk factor of Shanghai real estate market in the present situation,analyses the existence in such aspects as land management,market supply,government adjusting control and bank credit,and puts forward corresponding suggestion of how to solve them.
Affect
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The policy of supporting the real estate industry was placed by a series of tighten measures in the post-crisis era,which provoked the concerns on real estate market risk.The contraction of trade volume,falling house prices and real estate stocks and the default risk of real estate trust highlight risks of the real estate market.The impact of real estate on consumption,investment and other industries makes the real estate market be deeply interfered by government and financial capital.So,the attitude of government naturally become an important factor which decides the trend of real estate market.The factors such as government regulation intend to promote the real estate market integration,urbanization economic development strategy supports strong demand for the real estate,the real estate price supported by inflation make the real estate market have no systemic risk in the short term.However,in the long run,we should be alert on the impact of exchange rate fluctuations and changes in population age structure to the real estate market.
Income approach
Corporate Real Estate
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An important reason for rising prices is the market monopoly, and Lerner index is an important indicator to measure the degree of market monopoly. Based on the real estate sales prices and sales data, the real estate market monopoly degree was calculated. The results show that China's real estate market monopoly is rather serious is one of the important reasons for the failure of China's real estate market. In order to solve the living problem and guide the healthy development of the real estate market, the government should promote competition in the real estate market.
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Monthly datum were handled through Co-integrating and Granger causality test to analyze influencing factors on Shanghai real estate price alteration from Feb 2003 to Aug 2006.Results indicated that macroeconomic are main factors pushing up real estate price as well as the ratio of investment in housing to fixed asserts. PDI and vacancy ratio had little influence on the price. But new real estate policies repressed the price greatly. We can conclude that Shanghai real estate market was in non-equilibrium conditions and proper macro-controlling policies were needed to make assure the real estate industry in exuberance.
Investment
Empirical Research
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No study to date has empirically explored the characteristics associated with the market demand for real estate services. This study uses microeconomic theory and a panel data set of metropolitan statistical areas (MSAs) in the United States to uncover elasticity estimates of the market demand for real estate with respect to own price, income, business cycle fluctuations, and other variables. The empirical findings yield a number of important insights regarding the market demand characteristics associates with real estate services. First, own-price elasticity equals roughly -1.20, suggesting an elastic demand for real estate services exists at the market level. Second, the income elasticity is found to be approximately 0.40, indicating that real estate services represent a normal good. Third, business cycle fluctuations, as represented by changes in the unemployment rate, are shown to influence the real estate services market but not to a significant extent. Finally, crime rates are shown to have no independent impact on the demand for real estate services despite earlier studies finding that crime reduces housing values and sales.
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Based on the particularity of real estate,real estate market is derived slope of the demand curve,then analyses the relationship between the high price and market supply and demand in China's real estate market when the demand curve of the real estate market is positively sloped curve,using the method of equilibrium analysis.The conclusion of the essay is China's house prices will rise in long-term and will be instability in short-term.
Price on application
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The year 2011 is an unusual year in real estate market.From the beginning of 2011,the central government has carried out a series of control policies to exert control in the real estate market.With these control policies,speculative demand was curbed,the trade amount decreased,the construction of low-rent house sped up,and the supply-demand relationship was promoted.At the end of 2011,both the trade amount and house price went down,and the control in real estate market had gained results.In 2012,the government should strengthen the control results,push forward the adjustment in real estate market,and establish the long term mechanism for the healthy development of real estate market.
Corporate Real Estate
Price on application
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In order to stabilize the real estate market overheating,in recent years the Chinese government has issued a series of macro-control policies in aspects of land,credit,taxation and industrial.After analyzing the impact of macro-control policies on real estate sales area,real estate investment and real estate sales prices index by constructing a vector autoregressive model and pulse response function,we found that the impact of real estate market affected by national macro-control policies is delayed and periodic,and that the impact on supply and demand of real estate market affected by national policies is different.The government should primarily use land policy and credit policy to intervene the development of the real estate market.
Overheating (electricity)
Corporate Real Estate
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Real estate price determines the wealth of society and residents,and its fluctuation not only has impact on the safety of the financial system,but also affects macroeconomic stability and development.Real estate price is greatly affected by income,interest rates,and land prices,especially income and interest rates.Meanwhile,there is a large gap between real estate potential demand and effective demand.At present,the relevant departments should pay more attention to the scale of real estate effective demand,and appropriately adjust interest rates,land supply,so as to ensure the stable development of real estate market.
Income approach
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The real estate market is a single-direction market.The real demand separates from the speculating demand,and instead of the price,the vacancy rate is the main means to clean the real market when the demand decreases.There is a positive feedback mechanism among demand,price,and finance in real estate.Besides the factor of real estate finance,macro-economy and industry structure, anticipation psychology in market,and management policy make prices of real estate periodical change.The running law of real estate market demands us to strengthen the forecast and interfere.
Price on application
Anticipation (artificial intelligence)
Corporate Real Estate
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