Residential Land Prices Research Articles

Local government land monopoly in China: the influence of residential land price on supply

ABSTRACT China’s current land system allows local governments to monopolize land supply, and such monopolist power induces local governments to distort the residential land supply in line with their own interests. This paper uses an overlapping generation model to depict the profit maximization behavior of local governments. The theoretical model suggests that local governments in cities with strong economic conditions would face a lower magnitude of price elasticity of demand and would choose a higher residential land price corresponding to a lower residential land supply to achieve profit maximization. To empirically evaluate the theoretical model, the paper adopts Instrument Variable (IV) estimates and investigates data collected from 142 prefecture-level cities between 2010 and 2020. It suggests there is a negative causal relationship between residential land prices and per capita residential land, thus validating the theoretical model that local governments prioritize profit maximization over meeting the local population’s housing demands.

The Spatio-Temporal Development and Influencing Factors of Urban Residential Land Prices in Hebei Province, China

The Spatio-Temporal Development and Influencing Factors of Urban Residential Land Prices in Hebei Province, China

Applying the LightGBM model and SHAP interpretation to understand the urban land price index and its influencing factors in China

ABSTRACT Investigating the key factors affecting land prices is conducive to establishing targeted market-oriented reforms of the land market and promoting its healthy development. Traditional linear analysis cannot comprehensively compare the importance of feature variables and is unable to analyse the nonlinear influence process of feature variables. Therefore, based on the land transaction dataset from 2011 to 2020 in China, we used machine learning and the Shapley Additive exPlanations method to analyse the importance ranking of factors affecting land prices and analyse the nonlinear influence processes. The government fiscal, industrial development, and financial system indices are determined as the most important factors affecting residential, commercial, and industrial land price indices, respectively, and each exhibits different characteristics. The financial system index exerts the strongest impact on land price indices in large cities, whereas transportation and communication indices are the most dominant in small cities. Moreover, industrial development index is the most important influencing factor in industrial cities, whereas regional economic index exerts the greatest impact in small cities. By employing machine learning methods, we determined nonlinear effects that traditional linear models fail to obtain. Based on the results, we propose policy recommendations for market-oriented reforms on the land market, real-estate policies, and a stable monetary system.

Neighborhood externalities modify the nexus between residential land and housing prices: A joint analysis using regression tree models

Neighborhood externalities influence residential land prices and housing prices simultaneously, contributing to a nexus relationship between them. Most existing studies have focused on the causal relationship between the two, with limited attention to their nexus. This research matched land parcel transactions from 2003 to 2015 and housing transaction records with purchasers’ housing purchase records before 2019 to construct a spatial-temporal land-housing dataset in Shanghai. Both spatial statistical tools and regression tree models were employed to explore the underlying mechanism, focusing on proximity to industries. According to the modeling results, residential land prices and housing prices are highly sensitive to polluting industries and producer service industries. The impacts of polluting industries on residential land prices have intensified, but the impacts on housing prices have not. The regression tree models further showed that living service industries were the primary positive contributor to residential land and housing prices. Regarding the social environment, non-local people are taking over communities with high-priced housing on high-value residential land parcels. These research outcomes encourage more efforts to explore the determinants of the nexus between residential land prices and housing prices, rather than discussion of the causality relationship.

Das House Kapital: A Long-Run Theory of House Prices and Housing Wealth

Abstract Over the last 70 years, many advanced countries have experienced growing real house prices and an increasing housing wealth-to-income ratio. To explain these long-run patterns, this paper introduces a novel multi-sector growth model where housing services are produced using non-reproducible land and reproducible structures. Land is also employed in the non-housing sector. First, we identify two fundamental mechanisms driving the long-run increase in the real house price: (i) technological progress in the construction sector lags behind the technological progress of the rest of the economy and (ii) housing production is more land-intensive than non-housing production. Second, we study transitional dynamics for the US, UK, France, and Germany. Our calibrated model explains most of the observed increase in the housing wealth-to-income ratio since 1950. Counterfactual experiments identify initially low stocks of residential structures and non-residential capital as key exogenous drivers for this increase. The associated investment incentives led to a long-lasting construction boom and steadily increasing land scarcity, boosting residential land prices.

Gentrification outcomes of greening in different urbanization stages: A longitudinal analysis of Chinese cities, 2012–2020

Green-space-triggered gentrification, wherein original residents are displaced by wealthier individuals owing to the creation of new green spaces, has been criticized for exacerbating environmental injustice. While previous studies have explored green-space-triggered gentrification in individual cities, few have examined heterogeneities across multiple cities, especially in developing countries where cities are at different stages of expansion. The roles of green space in different stages of urbanization can produce varying outcomes of gentrification. This study investigated the relationship between green space and gentrification in Chinese cities from 2012 to 2020. The normalized difference vegetation index (NDVI), distance to adjacent parks, and area of adjacent parks were used as indicators of green space, while nighttime lights and residential land prices were used as proxies for gentrification. Nationwide analyses indicated that both increasing NDVI and building new parks nearby could lead to gentrification, but the park area had a marginal effect. Stratified analyses further showed that the effect of green space on gentrification was related to the different roles of green space associated with the stage of urbanization. Cities with higher urbanization rates were more affected by NDVI but less affected by park distance. Our findings provide insights for urban planners and decision-makers on developing localized strategies that mitigate the varying outcomes of gentrification at different stages of urban development.

Sub‐Model Aggregation for Scalable Eigenvector Spatial Filtering: Application to Spatially Varying Coefficient Modeling

This study proposes a method for aggregating/synthesizing global and local sub‐models for fast and flexible spatial regression modeling. Eigenvector spatial filtering (ESF) was used to model spatially varying coefficients and spatial dependence in the residuals by sub‐model, while the generalized product‐of‐experts method was used to aggregate these sub‐models. The major advantages of the proposed method are as follows: (i) it is highly scalable for large samples in terms of accuracy and computational efficiency; (ii) it is easily implemented by estimating sub‐models independently first and aggregating/averaging them thereafter; and (iii) likelihood‐based inference is available because the marginal likelihood is available in closed‐form. The accuracy and computational efficiency of the proposed method are confirmed using Monte Carlo simulation experiments. This method was then applied to residential land price analysis in Japan. The results demonstrate the usefulness of this method for improving the interpretability of spatially varying coefficients. The proposed method is implemented in an R package spmoran.

Improving the SNA: Alternative measures of output, input, income, and productivity

AbstractThe current System of National Accounts (SNA) Gross Domestic Product (GDP) concept does not measure the income generated by the production sector since it includes depreciation and excludes capital gains and losses on assets used in the production sector. The paper suggests an accounting framework that measures the income generated by the production sector of an economy and implements this measure using the Augmented Productivity Database (APDB) developed by Asian Productivity Organization and Keio University for China over the years 1970–2020. Real gross and real net income generated by the Chinese production sector are decomposed into explanatory factors including TFP growth using the framework suggested by Jorgenson and Diewert and Morrison. TFP growth is further decomposed into technical progress and inefficiency components using the nonparametric approach developed by Diewert and Fox. The APDB has estimates for the price and quantity of agricultural, industrial, commercial, and residential land used in China. The paper argues that changes in land use should be treated in the same manner as inventory change and added to the alternative output measures. It turns out that Jorgensonian user costs for land are frequently negative. The problems associated with negative user costs are discussed in the paper.

Move, Stay, or Pay: The Impact of Land Prices on Migration Balances in Germany

This paper examines the effects of housing costs on net migration in Germany, a country with a polycentric structure. We apply a panel data estimation framework with a large array of unit, time, and regional fixed effects to close to 400 individual counties for the period of 2002 to 2018. Our findings suggest a strong and negative relation between residential land prices and net migration. We conclude that higher land prices can largely offset the additional amenities factored into housing costs and hence cause negative effects on migration. We show that our results are robust to various control specifications, including the addition of variables such as income, education, and age structure, and the use of time lags.

Move, Stay, or Pay: The Impact of Land Prices on Migration Balances in Germany

This paper examines the effects of housing costs on net migration in Germany, a country with a polycentric structure. We apply a panel data estimation framework with a large array of unit, time, and regional fixed effects to close to 400 individual counties for the period of 2002 to 2018. Our findings suggest a strong and negative relation between residential land prices and net migration. We conclude that higher land prices can largely offset the additional amenities factored into housing costs and hence cause negative effects on migration. We show that our results are robust to various control specifications, including the addition of variables such as income, education, and age structure, and the use of time lags.

Study on the Spatial Correlation Characteristics of Residential Land Prices in Counties of the Urban Agglomeration in the Middle Reaches of the Yangtze River and Their Influencing Factors

The role of residential land price in regulating local economic development and optimizing urban land spatial layout is becoming more and more prominent. This paper takes the residential land price of 229 counties (districts, cities) of urban agglomeration in the middle reaches of the Yangtze River in 2017 as the research object, and establishes a theoretical model of the influencing factors of county residential land price based on equilibrium price and regional economic theory; and uses methods of spatial autocorrelation analysis and spatial lag model to explore the spatial distribution characteristics and influencing factors of residential land price in the research area and the influencing factors. The research results indicate that: (1) There are significant overall differences in residential land price among different counties within the urban agglomeration in the middle reaches of the Yangtze River, and the overall distribution of residential land price shows a "pyramid" pattern from low to high. (2) The spatial distribution pattern of residential land price in counties within urban agglomerations is greatly influenced by the location conditions and the administrative level of higher-level cities. The residential land price shows an inverted "U" distribution in the east-west direction, with the eastern part being higher than the western part as a whole; There is a gradual downward trend from north to south in the north-south direction. (3) The Global Moran’s I of residential land prices in the research area is 0. 603, with a significant spatial positive correlation and agglomeration phenomenon. and the obvious local spatial agglomeration characteristics. (4) There is a significant positive spillover effect between county-level residential land price in the urban agglomeration of the middle reaches of the Yangtze River. The residential land price in the study area is strongly influenced by both land supply and demand factors, policy systems, and government regulatory capabilities. The relevant conclusions can provide reference for urban agglomeration to optimize urban resource allocation through land price regulation, narrow regional development gaps, and promote the integrated development of the region.

Land market segmentation along ethnic lines: Four urban localities in Israel as a case study

Land market in Israel is formed by several submarkets stratified by ethnicity of local residents – Jews, Arabs and Druze. However, no study, carried out to date, investigated the magnitude of land price differences between these submarkets and factors affecting them. The present study attempts to fill this gap by comparing residential land prices in four towns of comparable size, one of which (Daliyat al-Karmel-Isfiya) has predominantly Druze population; the second town (Afula) is mostly populated by Jews; the third town (Shefa-'Amr) has a mixed Arab and Druze population, and the fourth town (Baqa al Gharbiyye-Jatt) has a homogeneous Arab population. The analysis covers the period between 2000 and 2016 and uses transaction records obtained from the Israel Tax Authority. The study reveals significant land price differences between the Jewish town of Afula, in which land prices are relatively high, and the rest of urban localities under analysis, where land prices are relatively low. Concurrently, there appears to be no significant differences in land prices between Arab and Druze localities under study. As the study also shows, market fundamentals (such as population income and natural population growth) appear to affect land prices in Afula only, while there is no evidence of any significant effect of these factors on land prices in Arab and Druze localities under analysis. We attribute these differences to the fact that land market in the Arab and Druze sectors in Israel is a distinctively different submarket, which appears to be heavily shaped by "informal" land transactions within the family, and unregulated property rights that effectively prevent mortgaging and land sales outside the community. The study highlights the extent to which land market restrictions and inefficiencies can alter land price trends.

Does subway mileage affect urban housing prices? An economic growth perspective

ABSTRACT Studying the mechanism by which urban subway construction in China increases housing prices can help deepen the understanding of the factors that rises in housing prices and may assist the government to conduct reasonable macro-control of the real estate market. This article takes unbalanced panel data from 31 major cities in China as research samples and studies the mechanism by which urban subway construction increases housing prices by influencing urban economic growth. Our findings are as follows: (1) Subway construction promotes urban economic growth, and urban economic growth, from both the demand and supply sides, increases housing prices by increasing the disposable income of urban residents and the purchase price of residential land. (2) Urban subway construction increases city land purchase prices by affecting investors’ expectations of urban land development through the regulating effects of urban economic growth, which in turn increases housing prices. (3) Effective policy measures aimed at managing the speculative impact of metro construction on housing prices need to be viewed for the expectation management of housing and land speculative demand from both the demand side and the supply side.

Wind and Water: How Extreme Weather Conditions Impact Residential Real Estate in Developing Countries

The damaging effects of extreme weather is concerning for many countries across the globe. Though the impact of these events on the housing market has been studied extensively, one aspect that remains unexplored is the value of mortgages. Further, there is no clarity on the impact of the specific types of homes. This study analyzed mortgages and apartment values and included residential land sale prices over 16 years for different localities across Jamaica. The analysis revealed that mortgages are adversely affected by excess rainfall while apartment sale prices are reduced by hurricanes but increased by excess rain. However, residential land prices remain unaffected by both events. The results point to the importance of climate adaptation for the local real estate market and property investment.

Assessment of the trends of urban land lease price from spatio-temporal perspective in Ethiopia: evidence from Bahir Dar City

Land price maps help the government and stakeholders to recognize fluctuations in land values in the economy. This paper aims to examine the trends of land lease prices from spatio-temporal perspectives for development. The study employed a mixed research approach. The result indicated that the lease price of residential land has been increasing rapidly in the past decade. Inefficiency in the land administration system, high speculation, and low provision of land for auction are the main drivers for the increment. The researchers thus suggest that the government rethink the tenure system, impose the maximum number and size of land parcels, and introduce the capital gain tax.

Evaluation of the operation status of the residential land market in Beijing-Tianjin-Hebei region of China and its spatiotemporal pattern characteristics.

Exploring the operation status and patterns of urban land markets is an important theoretical and practical topic for promoting coordinated socio-economic development. In this study, the operation status of the residential land market in the Beijing-Tianjin-Hebei region and the characteristics of its pattern were analyzed using the composite index method and the 3σ rule of the normal distribution and taking the 174 counties in Beijing, Tianjin, and Hebei, China, as the research objects. The results show that ① Beijing, Tianjin, Langfang, Zhangjiakou, and Baoding residential land market state composite indexes are all in the middle to upper levels in the Beijing-Tianjin-Hebei city cluster, while Qinhuangdao, Handan, and Chengde residential land market state composite indexes are generally low. The harmony between the residential land price and national economy, the market supply and demand balance, and the structural balance may become the main factors affecting the healthy development of the residential land market in Beijing and Tianjin. ② The proportion of counties with "healthy" residential land market in all dimensions and overall market status reached over 64%, and the residential land market in the Beijing-Tianjin-Hebei region is running well. The rapid increase in residential land prices from 2016 to 2020 was an important driver of the increased heat in the residential land market across the region. ③ The residential land market in the counties around Beijing and Tianjin is significantly hotter than in other regions, and there is an obvious polarization effect in the operation state of the residential land market in the Beijing-Tianjin region. The residential land market is generally cold in the counties in the southern and northeastern parts of the region and other peripheral areas, and there is a risk of marginalization in the development of the residential land market in the counties in the peripheral areas. ④ Both the hot and cold residential land market states exhibit spatial clustering characteristics. Most of the clusters are not consistent with the municipal administrative boundaries, and the states of the residential land market in neighboring counties are very similar.

Residential Land Prices Changes and Tourism Development in Watukarung Village Pacitan Regency Within Local Communities Perspective

Tourism objects in Pacitan Regency are increasingly diverse and attract tourists from within and outside the region to visit. The price of residential land is one aspect that has also changed along with these developments. The phenomenon of changes in land prices also occurred in Watukarung Village. This study aims to analyze changes in the price of residential land and its relation to tourism developments that occurred in Watukarung Village based on the perceptions of the local community. The method used is qualitative with data collection techniques in the form of in-depth interviews. The data from the interviews were processed using data reduction techniques so that a unit of information was obtained which could then be analyzed descriptively qualitatively. The accuracy of the data obtained was tested using a data source triangulation technique that compared the results of one informant with another. The result shows that the development of tourism has attracted foreign tourists to come and buy residential land in Watukarung Village. The price of residential land by the beach was originally around IDR 300,000/m2 increase to IDR 1,000,000 to IDR 1,500,000/m2. Based on the perception of the local community, the significant increase in the price of residential land is closely related to the development of tourism that has taken place in Watukarung Village. However, there are also people who have the perception that rising residential land prices and tourism development have no direct relationship.
 Keywords : Land Prices; Settlements; Tourism Development
 
 Copyright (c) 2023 Geosfera Indonesia and Department of Geography Education, University of Jember
 This work is licensed under a Creative Commons Attribution-Share A like 4.0 International License

Spatial‐temporal evolution characteristics of residential land prices based on the 2010–2019 land transfer data in China

AbstractStudying spatial‐temporal change in residential land prices (RLP) can help implement real estate regulations to promote the healthy development of the residential land market. This study applied the urban scaling law to explore the spatial‐temporal pattern of RLP from 2010 to 2019 in China. We found rapid growth in RLP across China from 2010 to 2019, with a growth rate of 179.12%. Among them, the Eastern Region had the highest RLP and growth rates. Furthermore, differences in RLP between large cities and small‐medium cities widened, indicating a trend of the Matthew effect in prefecture‐level cities. Moreover, the scale‐adjusted metropolitan indicator (SAMI) indicated urban agglomerations including Beijing‐Tianjin‐Hebei (BTH), Yangtze River Delta (YRD), Guangdong‐Fujian‐Zhejiang Coastal (GFZ), and Pearl River Delta (PRD) located in the Eastern Region had higher RLP than urban agglomerations with the same population size. In addition, the SAMI also highlighted disproportionately high RLP in some small‐medium cities compared to equivalent cities, warranting regulatory policy attention.

Is Rising Residential Land Prices a Consequence of Domestic or Foreign Land Demand? Evidence From Mauritius Island

Some emerging island economies have been fostering foreign direct investments in the real estate market. Given the rise in real estate demand under such contexts, this must have entailed a rise in land demand, and subsequently, land prices could have been affected. This study assesses if the rise in land demand caused by domestic and/or foreign land demand has been influencing residential land prices in Mauritius. To undertake the research, annual data was collected from the year 2000 to 2019 and a structural time series approach was used. It was found that unobserved components, namely the trend level and slope, as well as the cycles were significant in explaining land prices. It was concluded that fluctuations in land prices are significantly explained through latent variables, such as regulations in the land market, fiscal policies concerning mortgage loans, and speculative land buying among others. It was also found that foreign real estate investment (FREI) used as a measure of foreign land demand did not significantly influence land prices. To further probe the factors affecting land prices in Mauritius, domestic demand-side factors were considered and it was found that income, population, unemployment, and real construction costs were significant in explaining land prices.

Interaction between Urban Expansion and Variations in Residential Land Prices: Evidence from the Cities in China

Urban expansion is the result of the comprehensive action of various social and economic factors, among which variation in land prices is regarded as the leading factor affecting the direction and intensity of urban expansion. However, few of existing studies have explored the interaction relationship between urban expansion and variations in residential land prices, which needs to be looked at urgently in both theoretical research and decision-making practice. In this study, based on theoretical analysis, a panel vector autoregression model was constructed using the data of 104 cities in China from 2001 to 2017. The results show that there is a long-term two-way causality and mutual promotion between urban expansion and increases in residential land prices. The increase in the residential land supply caused by urban expansion will restrain the rise of residential land prices, but this effect is not sustained over the long run. Both urban expansion and residential land price rises are subject to inertia, the latter to a greater extent than the former. The results also reveal that the interaction differs for cities at different stages of economic development. Based on the analysis, policy suggestions for guiding urban expansion and further exerting macrocontrol over land market are proposed.