Research on the Impact of Real Estate Investment on Housing Prices

Case Study of Anhui Province

Abstract

The real estate market occupies a core position in the national economic system, and its steady development is very important to maintain the steady growth of macro economy and promote the balanced progress of social well-being. This paper aims to explore the impact of real estate investment on housing prices and its regional heterogeneity, using the data of 16 prefecture-level cities in Anhui Province from 2001 to 2022. Using two-way fixed effect model, we find that real estate investment has a significant positive impact on housing price, which is still robust after controlling economic variables such as economic development level, government intervention degree, industrial structure, human capital and asset scale. The heterogeneity analysis further reveals that there are significant differences in the impact of real estate investment on housing price in northern Anhui, central Anhui and southern Anhui, and the positive impact in central Anhui and southern Anhui is more significant. Based on these conclusions, this paper puts forward targeted policy recommendations, including implementing regional differentiated regulation strategy, maintaining the balance between market supply and demand, strengthening market supervision, promoting the coordination between economic development and housing policy, and providing financial policy support, to promote the stable and healthy development of the real estate market in Anhui Province. The results not only provide a new perspective for understanding the operation mechanism of the real estate market, but also provide theoretical and empirical basis for formulating effective macro-control policies, which has reference significance for real estate market regulation in other regions.