Determination of the Price and Supply of Land

Question 1

what are the traditional market-oriented factors?

Answer 1

1) Land Size (as the plot size increases, land value per unit decreases)
2) Location (key factor. Industrial land buyers are willing to pay a premium for plots near train stations, non-industrial land buyer near subway stations)
3) Zoning Use (type of use allowed - commercial and mixed-used plots typically bring higher prices than residential)
4)neighborhood characteristics (buyer of industrial land prefer neighborhoods away from retail activities with higher proportion of migrants)

Question 2

what are “Chinese Characteristics”?

Answer 2

1) Influence of state-owened enterprises (SOE)
2) Measurements undertaken by the government to attract FDI, eg tax breaks and discounts on land purchases
3)public transactions, so the sale of land use rights through public transactions

3) prices are more likely to be dtermined by market forces and less

by buyer characteristics

Question 3

How are the prices for industrial land determined compared to non-industrial land?

4 differences, 1 in common

Answer 3

1) industrial land genereally sold at lower prices than commercial & residential bc demand is lower
2)industrial land prices more influenced by neighborhood factors
3)distance to metro network is important for non-industrial vs. to railroad station for industrial land
4) no evidence for more favorably treatment of FDI for the sale of industrial land

1 in common: influeneces by tradiotional market-oriented factors & chinese characteristics

Question 4

further factors affecting industrial land prices compared to non-industrial

3 Stück

Land ratio

Answer 4

1) Proximity to CBD: buyers of industrial prefer land farther away fromthe CBD
2) plot size: non-linear relationship between plot size and price for industrial plots (first increase, then decrease)
3) land ratio: prices more strongly influenced by the land ratio than prices for non-industrial land

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