Examining the Impacts of Land Supply on Housing Price in Chinese Mega Cities: An Analysis of Prefecture-Level Cities in China from 2009 to 2016
Wu Yaxin, Tian Li, Ling Yingkai
Residential land supply is considered a powerful tool for intervening in the housing market in China. There has been continuous debate on the correlation between residential land supply and housing prices. Based on 35 Chinese prefecture-level cities’ panel data from 2009 to 2016, this study investigates the spatio-temporal characteristics of residential land supply and housing prices, and explores their relationship applying Generalized Moment Models (GMM). The results show that ① there is an overall downward trend in residential land supply and a significant rise in housing prices in most Chinese mega cities from 2009 to 2016, and the extent varies in four economic-geographical regions; ② the decrease in the quantity of residential land supply contributes to the rise in housing prices to some degree, but there is no significant correlation between the land supply structure and housing prices. With the integration of socio-economic factors, the quantitative results validate the previous theoretical models of the casual correlation between residential land supply and housing prices. It further depicts the constraint of insufficient residential land supply in Chinese mega cities and claims it to be a contributor of rising housing prices. The paper concludes with implications for housing strategies and future studies.
Keywords residential land supply; housing prices; China