Abstract: The real estate market is essential for promoting economic growth, and it plays an important role in the transmission mechanism of monetary policy in China. In this study, we apply a smooth transition vector autoregression model to investigate the asymmetrical effects of monetary policy and output on the real estate market. The empirical results verify the effectiveness of the monetary policy based on the real estate market and the asymmetrical effects of monetary policy and output on the real estate market. In addition, the smaller response of the real estate market to output in a low-speed growth regime means that negative shocks (e.g., COVID-19) from output have weak effects on the real estate market. Finally, monetary policy has bigger positive effects on the real estate market in a low-speed growth regime; thus, quantitative easing monetary policy can effectively stimulate China's real estate market at present.

Keywords: Real estate market;Monetary policy;Output;Asymmetric effects;C51;E52;E61