The Impact of Foreign Direct Investment on China’s Housing Prices

Abstract

Nowadays, the real estate industry in China can be referred to as an unique economy leading industry. Due to the rapid development of our country’s macroeconomic environment and urbanization process, this makes the real estate market develop very fast, apart from this, the relationship between the overheated investment in real estate market and the excessive and rapid increased price of real estate has become a hot topic of concern for all sectors of society. This article mainly conducts in-depth research on the impact of foreign direct investment on housing prices in China through theoretical and empirical analyses. Through the multiple regression method and adopted the annual data of 2010-2019, analyzed the influence of foreign real estate investment on our country’s real estate prices. The results show that foreign direct investment is positively related to house prices. Finally, It can be concluded that foreign direct investment will increase our country’s housing prices, and corresponding suggestions are made in three aspects: laws and regulations, regulatory mechanism, and early warning mechanism related to real estate and foreign direct investment according to China's national conditions.