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Research Seminars & Workshops @ IRES


Ms Wang Yourong
Department of Real Estate, NUS

Urban Growth and Housing Market: The Impacts of Differential Treatments in Urban Land Supply in Chinese Cities


Date:

13 February 2012, Monday

Time:

12.30pm - 2.00pm

Venue:

SDE School Conference Room


Abstract

Providing cheap non-residential land is one of the main tools for the government of municipal city level to stimulate local economic growth. Meanwhile, the local government relies on "land finance", especially residential land leasing fee to generate revenue to finance economic growth. This leads to significant differential treatments between residential and non-residential land use. Specifically, the land for housing is under-supplied at an extremely high price, whereas the land for non-residential use is over-supplied at a low price. In this research, I explore the impacts of urban land use pattern upon urban growth and housing price from a macro-economic view. A simple two-sector urban economic model is applied to predict the effects of the subsidization of non-residential land and the exploitation of residential land upon land use structure and urban outcomes, namely urban population size, wage rate, and housing price. Cross cities' data during the time period from 2003 to 2009 from China are used to test the predictions of the model. My results show that the differential treatments in urban land supply contribute to housing market booming and lagging urbanization in China.

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