Since the reform of house monetarization in 1998 in China, Chinese real estate investment and real estate price have been increasing very fast by the end of 2008. In China real estate industry, a pillar industry and a capital intensive industry, has closed relation with the quota of real estate credit supply. By SVAR model this paper uses monthly data of 1999-2008 to test the influence of real estate credit on real estate market. The result shows: the response from real estate investment to credit impact is like parabola which appears to have a decline trend to 0 after an initial ascent; but the response from real estate sale price is a negative trend after an initial positive trend. It is suggested that in the overheating real estate market, tight monetary policy can have a substantial action on restrict real estate supply and demand in short term, but the efficacy of credit policy has asymmetry in supply and demand. So this paper suggests when the real estate market is full of speculation with a great pressure of real estate price soaring up, the center bank can use credit policy together with tax and land policies to control short-term real estate market.
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