Constitutes Model of Housing Prices and Analysis of the Reasons for High Prices in China

By the study of changes in housing prices in Chines domestic during 1997-2009, we establish a Chinese house prices constitution model based on Analytic Hierarchy Process. The model is including five elements, namely, land acquisition costs, construction costs, the state's tax policy, developers expected profits and cost of sales, which does not consider regional differences. Because China has a vast territory, the regional economic development is uneven and housing prices are quite different, we select the typical city to modify the model based on different types of urban land cost impact on house prices. Meanwhile,we analyze the affect of the five elements to house prices changes. Further,we taking into the influence of land to the house prices of different types of urban, and the justifiability of land prices are analyzed and evaluated quantitatively. According to the calculation results, analyzing the reasons of high house prices in China and some suggestions are given.