The Research of Beijing Real Estate Wealth Effect

In recent years, almost all parts of the country have been developing real estate actively, and the housing price has been higher than ever before. China's real estate market development has reached to an unprecedented level. No doubt that the development of housing market has made great contributions to the national economy. Nevertheless, the high price aggravates the consumers' economic burden at the same time. The long-term of influence of both these two sides will finally play unnegligible part in the steady development of economy. Aiming at this problem, this paper will focus on the problem that whether real estate has wealth effects. Specific examples will be analyzed to find out whether the rising price of house has influence on urban consumption and what influence will that be. The empirical research shows that Beijing's real estate have remarkable wealth effect -no matter long-term or short-term,-and present a negative wealth effect on the consumption. High house prices or the keep-growing trend of price will restrain the consumption and ultimately affect the entire macroeconomic growth.