Relationship between demand and price of house increasing in China Research Proposal

Relationship between demand and price of house increasing in China - Research Proposal Example The results from their research had suggested that the major push in the rising demand of housing in China is coming from the stimulus provided by the government. The government strongly regulates the prices of the housing market by adopting relevant polices. According to the research conducted by Rothman (2011 cited in Stohldreier, 2012) government in China wants to influence house ownership which explains the high demand of housing in the country. Researchers have pointed out that there are many factors which influence the housing prices. For instance the research conducted by Beltratti and Morana (2010) had pointed out that the main factors which influence the price of housing include variables like private consumption, rate of CPI inflation, interest rates of the economy, stock price and price of oil. Few researchers have focused on the impacts of monetary policy on the housing market. The results obtained from their study are however mixed and does not show convergence. The research work undertaken by Iacoviello & Minetti (2008) had focused on the impact of credit channel on the housing market. The results from the study had shown that house prices are heavily influenced by changes in the interest changes of the economy. However, this research was conducted in the Western countries namely Finland, Germany, UK and Norway. Researchers who have focused on the Chinese market specifically have found that rising income of the households is one of the strongest factors that have influenced the demand for housing in China. The past three decades of rapid economic growth in the country have had a huge impact on raising the income of the middle-income households including their disposable income (Chen, Guo and Wu, 2011). Additional factors that have influenced the house of pricing in China include high rate of population growth, rise in savings rate, investment in fixed as sets and rising construction