Analysis on Housing Price Using Macroeconomic Indicators in China

Abstract

In China, one of the most important stimulations in economic development has belonged to real estate market after the reform and opening, and it also contributes a lot to the financial market. However, there are many arguments nowadays, believing that Chinese real estate market is on the process of bubbles, almost about to burst. This study aims at discussing the influences of some macroeconomic indicators on price of commercial housing in China between 2013 and 2022. GDP, interest rate, inflation rate and money supply are chosen to be the independent variables. Using correlation and regression models, the results show that the indicators are correlated with each other. The analysis shows that there is a strong positive correlation between China’s GDP and commercial housing price which is the key for future economic development. Inflation positively correlates with the commercial housing price and a strong negative correlation is found between commercial housing price and interest rate and money supply. This research suggests that government should regulate and control macroeconomic indicators to protect the development in real estate market.