Abstract
Abstract Scholars have a variety of theoretical explanations for housing price growth. However, few scholars have studied the internal influence mechanism among urbanization, land finance, and housing price. Based on the data of 182 prefecture-level cities from 2009 to 2016, this paper studies the influence of land finance on housing price under different urbanization rate levels. The study finds that with the increase of urbanization rate, the effect of land finance on housing price presents a “U” shape. Specifically, an increase in land finance by 1% results in a corresponding increase in average housing price by 0.18%, with relatively low urbanization rate, 0.06% with medium level of urbanization rate, and 0.38% with high level of urbanization rate.
Highlights
Since the 21st century, China has seen rapid economic development and urbanization, with the urbanization rate increasing from 35% in 1999 to 60% in 2019
Based on the data (Figure 2), we observe that land finance rises in a volatile manner, but the housing price rises continuously, so the relationship between the housing price and the land finance may be a type of nonlinear relationship, which may be related to the level stage of urbanization
Land finance is measured by land transfer fee, housing price is measured by the ratio of commercial housing sales to commercial housing sales area, and urbanization rate is measured by the ratio of the permanent urban population to the permanent urban population of the city
Summary
Since the 21st century, China has seen rapid economic development and urbanization, with the urbanization rate increasing from 35% in 1999 to 60% in 2019. Xie and Huang[5] studied the relationship between housing price and urbanization rate from the perspective of real estate supply and demand They believed that the increase of urbanization rate would promote the prosperity of real estate-related industries and the rise of housing price. Based on the data (Figure 2), we observe that land finance rises in a volatile manner, but the housing price rises continuously, so the relationship between the housing price and the land finance may be a type of nonlinear relationship, which may be related to the level stage of urbanization Based on this economic background and existing theoretical analysis, this paper adopts a threshold panel regression model to study the nonlinear relationship among housing price, land finance, and urbanization, under different urbanization stages, in order to determine heterogeneity in land finance’s effect on the housing price. Taking urbanization rate as the threshold variable, this paper performs an empirical study on the relationship between land finance and housing price using the panel threshold regression model. Based on the empirical results, this paper proposes policy suggestions for the government to implement land fiscal regulation and housing price regulation at different urbanization levels, enabling the government to carry out land management and real estate regulation policies more reasonably
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