House prices and the collapse of stock market in mainland China? - An empirical study on house price index

Publisher:
PRRES, UWS and UTS
Publication Type:
Conference Proceeding
Citation:
Pacific Rim Real Estate Society 15th Annual Conference, conference program, 2009, pp. 1 - 21
Issue Date:
2009-01
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The house price index decreases in Mainland China during the last few months have been accompanied by a collapse of the stock market which has fallen to 40% of its original high point. Many investors are concerned that the falling stock market will bring similar uncertainty to the housing market and induce a similar collapse of house prices. It is important to study the relationship between these indexes in order to understand the impact of the stock market on the housing market. The analysis also provides information on investorsâ behavior and capital movement. The analysis of the relationships between the housing and the stock markets for mainland China employs an econometric approach. Monthly time-series data collected from the National Bureau of Statistics of China are tested and the empirical results suggest that the correlations between the housing and the stock markets are relatively weak. The collapse in the stock market is not likely to be duplicated in the housing market as while the stock market does impact on the housing market, the effect is relatively small. The paper starts with some background to the housing and stock markets to demonstrate the need for the current research. Secondly, the relationships and methodology and methods used to study markets are reviewed. Thirdly, the data collection and test procedures are outlined; and finally, the results from the tests and analysis and their implications are presented. http://www.prres.net/index.htm?http://www.prres.net/Proceedings/2009proceedings.asp
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