Jia Kang: The Rise And Fall Of House Prices Is Not Directly Determined By The Money Supply

In recent years, there are many researches and debates on the factors that affect the rise of house prices. Among them, money supply determines house prices, which has become a widely accepted view in recent years.

Since this year, under the background of global monetary easing, the phenomenon of house prices rising too fast in some domestic hot cities further magnifies this view.

So, is the rise in house prices really caused by excessive money supply? At the Boao 21st century real estate forum held a few days ago, Jia Kang, President of Huaxia new supply Economics Research Institute, researcher of China Academy of financial Sciences and doctoral advisor, pointed out that the money supply is the mechanism that affects the overall situation, and it is difficult to affect the price fluctuation of specific categories of goods. Considering the particularity of real estate, money supply can not directly determine the rise and fall of house prices.

House price must follow the market

"Real estate does not belong to the fictitious economy, but undeniably, it is often endowed with strong financial attributes." Jia Kang said.

Financial attributes make the trend of real estate market closely related to monetary policy and credit policy. Many experts believe that the credit policy and monetary policy have the greatest impact on the property market regulation policies. Among them, there is a positive correlation between the currency issuance and the trend of house prices.

So, is the rise in house prices due to excessive money supply? Jia Kang pointed out that the main feature of China's central real estate is the seller's market, which inevitably shows that the average transaction price in the medium and long term is an upward curve. "I don't think there is any power to change such a curve fundamentally. Our long-term mechanism can only make this curve less steep, especially less prone to ups and downs."

Jia Kang also pointed out that in the view of many people, real estate is a relatively safe investment object with a stable appreciation prospect, and many people are willing to put their ability to pay on real estate. Therefore, "we can not simply say that if we control the money supply, the price problem in the real estate market will be solved. This is not the relationship.".

As house prices have risen steadily over the past few years, real estate is also regarded as a stable investment target. Despite the continuous introduction of policies to curb investment and speculation, many houses still have the dual attributes of self housing and investment. This also makes the real estate prices tend to continue to rise when the currency circulation is not large.

Jia Kang also said that the money supply is the mechanism that affects the overall situation above the total amount. However, the price fluctuation of many specific categories of goods is more determined by the relationship between supply and demand and structural factors, rather than directly determined by the money supply.

Jia Kang also talked about the relationship between land price and house price, "some people say that if we control the land price, we will solve the problem (of house price), but this is only an administrative means, and the market has its own operating mechanism."

"The ultimate use of housing is to turn it into a commodity and sell it out. The price listed by the developer must be" in line with the market. " He said.

There are four goals in real estate tax legislation

Jia Kang thinks that the purpose of the progressive legislation of real estate tax in recent years is to achieve four goals: first, it is conducive to the stable and healthy development of the real estate industry; second, the optimization of income redistribution and the optimization of property allocation; third, the internal coordination between the construction of local tax system and the rationalization of local government functions required by the implementation of tax sharing system; fourth, to promote the development of the community and grassroots The development of the rule of law and democratization system of "public participation".

On May 18 this year, the Xinhua news agency was authorized to issue the "opinions of the CPC Central Committee and the State Council on accelerating the improvement of the socialist market economic system in the new era". The opinions mentioned three contents in the field of housing, which clearly stated that we should speed up the establishment of a modern financial and taxation system and steadily promote the legislation of real estate tax.

During the forum, Jia Kang said in an interview with reporters that the current real estate tax legislation belongs to the "low tide" period, and the latest statement of the management department is "steadily promoting the real estate tax legislation", no longer "accelerating the real estate tax legislation". According to the official position, the real estate tax will be launched within the term of the current NPC. At present, there is more than two years left, but judging from the situation this year, it is difficult to start the real estate tax within the legislative year.

"I personally believe that legislation should be initiated as soon as possible. After legislation, there are still procedures such as the first instance, the second instance and the third instance, and it may take a long time for the real implementation. After the legislation is launched, the substantive significance is to seek the maximum common divisor on the basis of gathering the opinions of all parties in the society on the track of legalization. " Jia Kang said.

But he also mentioned that it is difficult for China to copy international experience in real estate tax legislation. "When it comes to real estate tax, we have to consider a certain amount of tax exemption in China." He said that at present, the view of the majority is to tax-free according to the per capita housing area, but there are some disputes about this scheme. For example, tax exemption is allowed for people below 40 square meters per capita, but how to identify the number of families when they change will become a difficult problem.

In addition, if the first suite is exempted, it will also bring social problems, such as the tide of divorce.

Jia Kang believes that we can make the tax framework considered in legislation more relaxed, "my view is that two sets of double parent families should be tax-free, and single parent families should be tax-free. First, we should build up the institutional framework. "

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