Association model of fluctuations in interest rates, real estate investment and real estate prices

This paper starts from real estate control policies,focusing on the interaction effect of interest rates,real estate investment and real estate prices.This paper selects a total of 113monthly data from March 2003to July 2012,empirically,establishes VAR models and co-integration equation,and analyzes the impulse response of real estate price that caused by real estate investment and interest rates,and the variance decomposition that reflected by them.And then the paper comes to some conclusions as follows. Real estate investment has a positive impact on real estate price;and interest rates have a negative impact on the price of real estate,moreover,in the long-run equilibrium,real estate investment has a greater impact on house prices.Besides the real estate prices have a greater impact on the real estate investment,and the interest rate influenced largely by its own.Finally,this paper gives some recommendations:on regulating the price it should regard the interest rate as an important tool;combined with administrative and financial measures for a long-term implementation.It is important to focus on monitoring the real estate investment to crack down on speculative investment behavior,and regulate investment environment to guide benign investment behavior.