Land Use Policy for Real Estate Price Regulation: An Empirical Quantification on Price of Urban Land and Housing during the Economic Growth in China

In the background of the rapid economic growth in China, the urban real estate market has shown the soaring housing price that far from satisfactory. A great deal of policies has been issued to solve this problem for years,but the effect is limited. In this study,the VAR model was used to explore the relationship between urban land price and urban housing price under the circumstance of economic growth in China. Since the data is available from 1998 to 2008, seasonal variables were applied to establish the model in order to satisfy the statistical requirements of time series analysis. The impulse response analysis based on the result of the established VAR model shows that the urban land price has significant and stable effect on the housing price change from 1998 to 2008 in China,but not vice versa. GDP is proved to be an exogenous variable of the real estate price system and the effect of urban land price and housing price on GDP is not significant. This indicates that the sound development of the real estate price largely depends on the related land use policy, including the improvement of land transaction mode and amount, and the reduction of the transaction costs.