Evaluating the Rationality of Land Share of Housing Value in China’s Urban Housing Market —Based on International Comparison and Risk Analysis

Abstract

Land share of housing value is an important indicator linking land market and housing market. However, few studies have comprehensively discussed the rationality of China's land share of housing value. This paper first defined the rationality of land share of housing value as being consistent with international experience and meeting the needs of China's socio-economic stability. Then, this paper drew the following conclusions through international comparison and risk analysis: Firstly, China's current land share is at intermediate level among developed countries’ historical values. Land share’s trend, spatial distribution characteristic and relationship with urban socio-economic fundamentals in China are also similar to those in developed countries. Secondly, under the two hypothetical scenarios, through the “stress test”, it is found that the land share of most 35 large and medium-sized cities will not cause economic risks. Therefore, land share of housing value in China is generally reasonable, and the reasonable range is roughly 31.18%~57.91%. The land management department should dynamically adjust the land supply plans and control land share at a reasonable level from the perspective of preventing economic risks. Keywords—Land Share of Housing Value; International Comparison; Risk Analysis; Rationality