Empirical Research on the Impact of Interest Rate on Real Estate Stock Price

摘要

As a capital sector, the real estate industry is intimately correlated with financial sector through capital flow. Currently the average debt-to-asset ratio in the real estate business is 72%, the highest reached 94%, most of which come from credit Interest rate is the price of capital, so it directly affects the real estate industry. Real estate enterprises have highly developed over the years and at the same time our government revised the interest rate many times to control the macro-economy these years. China has entered into the new interest rate hike cycle since 2004. With this background, the supply and demand balance of the real estate market will be effected and lead to concussion in this industry. The listed real estate companies are excellent with standard management, which are the representatives of the real estate industry. Share price is the embodiment of the company intrinsic value. So the interest rate policy impact on real estate market should not be neglected. This study has important significance in theory and practice. It has references to enhancement of the policy beneficial effect, which enables China's real estate market to develop in a sound and steady way. This paper uses panel data to develop an empirical research about the relationship between real interest rates and the stock prices of real estate listed companies. The results show that real short and long-term interest rates are negatively related to the estate stock closing prices with significant but small coefficients. In addition, all the control variables have positive coefficients and significant except earning capacity.