This paper makes a quantitative dynamic analysis on demand and supply in our real estate market by using time vary- ing parameter model. The result shows the followings.Firstly, among the several factors affecting demand for houses, income elasticity is the biggest which is followed by price and interest rate elasticity. Secondly, among the several factors affecting supply for houses,price and interestrate elasticity are at large.Thirdly,various variable elasticity alsoshows that the monetary policy is effective in the real estate market while the high price of houses is the bottleneck whichhinders its development.Only by controlling the price of houses within a reasonable state can the effective demand increase and bubble be prevented.

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