Empirical Study on the Relationship between Money Supply and the Property Market

The property market and the money supply are highly relevant. The total value of residential is approximately equal to M2. The growth of M2 determines that of total value of residential and housing price, while the growth of property sales is generally determined by that of increment M2. Therefore, when the government takes the monetary policy to regulate the economy, it should take into account the impact on property market and takes some appropriate hedging policies.