An Empirical Study on the Impact of Bank Credit on Real Estate Price Fluctuations in China—A Case Study of 35 Large and Medium-sized Cities

Abstract

Fluctuations in real estate prices are closely linked to the macro-economy, exerting a profound influence on social investment and consumption levels. As a key source of funding for the real estate market, bank credit significantly affects housing price changes in major Chinese cities. This paper explores the transmission mechanisms and pathways of bank credit on real estate prices through theoretical analysis and empirical research. It constructs a panel regression model to empirically analyze the relationship between bank credit scale and housing prices in 35 large and medium-sized Chinese cities from 2012 to 2022, assess the impact of credit on housing price fluctuations, and compare differences between first-tier and second-tier cities. Based on these findings, the paper proposes suggestions for regulating housing prices by controlling credit scale, aiming to deepen the understanding of the relationship between bank credit and housing prices and support the stable development of China’s macro-economy and real estate market.