Empirical study on relationship between China's real estate price growth and market power-based on statistics from the Nation, 30 Provinces and 35 cities

Abstract

In recent years, with the deepening of marketization, China's real estate price has been increasing constantly and attracts the general concern of the whole society. In order to restrict the excessive growth of the market prices, the government continues to strengthen macro-intervention. In market economy, the formation of real estate price depends on the real estate market conditions. The power comparison of supply and demand sides will have a direct impact on the real estate price changes. The real estate market power of the supply and the demand reflects their ability to influence the real estate price, reveals the market conditions as well as structure characteristics of real estate market, and has significant influence on the growths of real estate price. In this paper we adopt Lerner Index to measure the real estate market power. We choose the real estate market sales data of the nation, 30 provinces and 35 large and medium-sized cities as sample and estimate China's real estate market power and the average increase of real estate price. Based on that, we analyze the relationship between increase amplitude of real estate price and the market power. The result of the study shows that China's real estate price changes and the real estate market power present a positive correlation and real estate market power is one of the main factors influencing the changes of real estate price. © 2014 Springer-Verlag Berlin Heidelberg.