The linkage of real estate market and capital market

In terms of portfolio theory, this paper develops a model to illustrate the linkage of real estate spatial and capital markets. The theoretical model indicates that the current house price is positively correlated with the current stock price, but the forward house price is negatively associated with the current stock price, and vice versa. The empirical results show that the housing price affects the stock price significantly, but the latter has no effect on the former. The returns of real estate and stock will significantly affect their prices. The forward prices will positively impact the current prices, but the forward real estate prices will negatively affect the current stock price.