Theoretical Analysis on Real Estate Prices and Suggestion for Government Regulation: An Application of Marx's Land Rent Theory

For nearly three decades, the economic development practices of global main countries have proved that high house prices become important factors that lead to abnormal economic fluctuations even an economics crisis. We review that, although we can use very complex quantitative economic models which take into account numerous information of supply and demand to analysis and forecasting real estate prices, but in fact the result is not satisfactory. Especially for China, which experiences a rapid economics growth under complex internal and external environment, the house prices are difficult to understand and estimate. The paper creatively applies classical theory, Marx's land rent theory: firstly, to establish the theoretical model of real estate pricing; second, to make dynamic theoretical analysis for real estate pricing; finally, to make policy recommendations for government's house price regulation.