Land sale venue and economic growth path: Evidence from China's urban land market

Two China-based geographers test the importance of market conditions and local institutions in determining the locational pattern of foreign direct investment in real estate development (FDIRE), a major component of China's urban growth since the 1980s. Using data from 35 major Chinese cities, they trace the diffusion of FDIRE from a concentration in China's major coastal cities in the late 1990s to a more dispersed pattern including large inland cities in 2008. In addition to investigating the general association between FDIRE, local market opportunities, and liberalized economies/more developed land markets, the authors assess differences in the locational behaviors of developers from Hong Kong-Taiwan-Macao and foreign countries. A concluding section explores the implications of FDIRE activity for the restructuring of China's urban system. Journal of Economic Literature, Classification Numbers: F210, L850, O180, R330. 3 figures, 7 tables, 35 references.

Real Estate FDI in Chinese Cities: Local Market Conditions and Regional Institutions

Increasing returns, land use controls and housing prices in China

Purpose – China's real estate market is rampantly expanding. The purpose of this paper is to examine the factors underpinning China's real estate price escalation from 1998 to 2009.Design/methodology/approach – Cointegration approach, vector error correction model and Granger causality test are adopted to analyze whether stable and long‐run equilibrium interactions exist between housing prices and key macroeconomic variables, such as CPI, land sale and GDP.Findings – Cointegration analysis shows long‐term equilibrium between real estate price (HP) and CPI or GDP, but not land sale. A bilateral Granger causality is observed between CPI and HP. However, GDP does not Granger cause HP, indicating personal gain (disposable income) does not catch up with national gain (GDP) in China, or “Guojinmintui” (national gain outpaces personal gain). Neither is there a feedback effect from HP to GDP, indicating housing price appreciation does not result in immediate capital gain or speculations in housing purchase. Besid...

What pushes up China's real estate price?

With the rapid development of land marketization in China, the spatial patterns of residential land prices in different regions have become increasingly complicated. The very high and continuously rising residential land prices in many cities are causing significant challenges to economic development and social stability. Yet, there has only been a limited amount of attempts made to model and analyze the regional dynamic changes of residential land price systematically, especially in term of the spatially varying effects of key demographic and economic factors. In this study we provided a perspective analysis of the changes of residential land prices in 2008, 2011 and 2014 based on the land price monitoring records of 105 cities and then conducted a geographically weighted regression (GWR) analysis on the relationships between residential land price and three major impact factors (i.e., immigrant population, gross domestic product (GDP) and investment in residential buildings). Results show that the areas in which GDP had relatively strong positive impacts on residential land price expanded with time. The negative effects of immigrant population on residential land price were mainly concentrated in the cities around the Bohai Rim and the area with negative effects gradually shrank in the three studied years. Conversely, the areas with negative correlation between investment in residential buildings and residential land price gradually expanded in size over time. A geographical detector was used to examine the relative importance of factors to residential land price. It was found that the GDP had more significant influence on residential land price than other factors and the influence of the three factors to overall variation in residential land price increased over the three studied years. These results underscore the importance of taking spatially varying effects of major driving factors into account in policy-making on regional land market.

Spatiotemporal Effects of Main Impact Factors on Residential Land Price in Major Cities of China

Since 2005, the Chinese government has frequently strengthened controls on the real estate market. Land supply policy was included in the system of state macro-control on the real estate market and state economic development. This paper examines the following issues after analyzing the panel data of Yunnan Province and other provinces of China. (1) Does land supply have significant effects on the real estate market after more than ten years of urban land reforms? (2) Which land supply policy affected the real estate market in China? (3) Does it affect the real estate market and macro-economic control of China's existing land supply policy? The main conclusions of the paper are: (1) Land supply policy has a significant impact on the real estate market with the deepening of China's urban land system reform and the development of the land market. (2) China's land supply policy, as a powerful macro-control tool, has an impact on the real estate market under the government's monopoly. (3) The effects of the land tenure and use reform can mainly be seen in the land supply quota and the extent to which the market-driven supply effects the real estate market. Land supply means the quota of land approved by the municipal government for real estate development and urban construction. China, a socialist country, has a state planned economy. The state owns all urban land and allocates land to each unit for no cost. Urban land, an important factor of production, has been pushed to market since economic system reform in 1979. The State Council of China published the 91st decree, the ''Regulations on Urban Land's Rent,'' based on the land rent policy reforms in Shenzhen and other coastal cities. The government is the only owner of urban land according to the decree. Governments at all levels have monopolies on urban land allocation on behalf of the state. There are two kinds of land supply. The first, non-market-oriented land allocation, is land allocated for city infrastructures for no cost, such as public utilities, green belts, and so on. The second, market-oriented land allocation, is land allocated for civil utilities based on rent, such as commerce, industrial, housing, etc. However, China's market-oriented land tenure and use reform has not been clear sailing due to historical reasons. It takes some time to transfer from non-market land allocation to market land allocation. The government selected different rent structures for land tenure and use according to the local economy and land availability. This is the land rent policy in China. Yunnan Province did not realize market-oriented land tenure and use until recent years (e.g., the central government required local governments to use more professional ways to launch land to market, such as biddings, auctions, sales, etc.). However, the local government commonly adopted the agreement price on land rent for a specified period due to historic reasons. The professional market-oriented land tenure and use, in the form of biddings, auctions, and sales, has been increasing in recent years under repeated requests from the central government. China' land supply system has unique features. First, land supply exercises government monopoly, which is similar to Hong Kong in China. It is the first level of the urban land market. The government is the only supplier of land. The second level of urban land market is the real estate trade among land users. A land developer has no right to trade land according to the regulations of China's ''Land Management Code'' and ''Urban Real Estate Management Code.'' Therefore, theoretically, there is no other land supplier except the government. The government can influence and control the real estate market by controlling the quota of land and its price. Second, China's land supply system controls the land supply quota. In addition, it has the power to control land rent. So the definition of 'Land Supply Policy' is the local government changing the quota of land supply and land supply modes to regulate the relationship between real estate suppliers and buyers. …

Hong Yunnan

Papers

Effects of Urban Land Supply Policy on Real Estate in China: An Econometric Analysis