Rent, Housing Price and Regulatory Policy - Based on Case Study in Shanghai

The paper, by the permanent-instantaneous model and information sharing model to Shanghai housing prices and rental prices coming Johansen co-integration test reaches an "interaction factor" existed a price growth rate between of real estate sale and rental market. While to housing sale and rent prices coming Granger non-causality test demonstrates that the "interaction factor" existing between housing sale and rental market is in a state of serious imbalance. Finally, By mathematical deduction reaches conclusion that serious imbalance of the "interaction factor" existed between real estate sales and rental market of the Shanghai causes that rate of bubble of the real estate market which is gradual expansion shows a the growing trend. With regards to this, we propose to gradually control the real estate market bubble phenomenon to reduce the real housing demand, increase supply and change the market anticipation by fostering rental market. Finally, raising some control measures to how to nurture housing rental market.