Land price changes in the evolving land market in Beijing

Abstract

PurposeThe purpose of this paper is to examine land price changes in Beijing 1993‐2004. Examination of attributes of land price changes seeks to illustrate whether this market is overshadowed by government regulations and controls leading to immature development and uncertainties.Design/methodology/approachLand price changes in Beijing within the study period are examined by statistical analyses as well as spatial observations using a GIS platform.FindingsLand prices in Beijing are influenced by common market indicators such as GDP growth and investment, although market transactions of land in this city are not entirely open and the so‐called market prices are largely price levels agreed between the private developer and the authority under private treaty grant, instead of open auction or tender.Research limitations/implicationsThe analyses of market land prices in Beijing in this paper show, however, that land prices do follow generally market principles and the highest and best use principle is more or less observed.Originality/valueThe paper shows that it is possible for a market mechanism to be established as long as the authority is resolved to achieve a steady reform progress in the urban land use system; however the basic conditions of a market mechanism may not be completely ready.