An Empirical Study on the Effect of RMB Exchange Rate on Real Estate Price

Real estate price and RMB exchange rate are the important issues which directly influence the national economy and people's living standards. Since the exchange reformation on July 21, 2005, the positive correlation between the continued appreciation of RMB and raise of real estate price caused great attention from the public. Based on that, this paper examines the impact of RMB exchange rate on real estate price by correlation analysis, co-integration analysis and granger causality analysis by using the quarterly data from the third quarter of 2005 to the fourth quarter of 2014. The empirical result shows that the RMB exchange rate has a significant positive impact on real estate price. In other words, the appreciation of RMB exchange rate will cause the rising of estate price.