Abstract As is known that inflation rate is greatly related with real estate yield. In order to test the effect of relation on the cycle of real estate in China, this paper researches the relationship between them in China with a markov regime model by setting three regimes of real estate cycle in China. It is found that the fluctuation of real estate in China depends on regimes; The expect part of inflation is significantly related with real estate yield in both “low speed regime and “medium speed regime”, with different directions; The cycle part of inflation significantly affects the real estate yield in all regimes with positive effects except in “high speed regime”. It shows that government policies may affcet the fluctuation of real estate.
2012, Vol. 1 
