Determinants of intercity house price difference in Shaanxi Province

In Shaanxi province, house prices in different cities show great differences. What is the driven force? According to 2005-2011 panel data of 10 cities in Shaanxi Province, the long-run equilibrium model and error correction model of house price are established to explain the reasons contributed to the house price difference among cities in Shaanxi Province. The empirical results reveal that: whether in long-term or short-term, per capita GDP, construction cost and real estate investment are determinants of house price. The rising house price in Shaanxi Province still relies on economic development. This paper argues that real estate adjusting policy should be made according to reality local conditions.