Home • PRRES Inc. Journal • Read the Journal

Valuation of Commercial Land in Less-Developed Cities in China

Author/s: Nelson Chan, Cifang Wu, Yanmei Ye, Hongwei Xu

Date Published: 1/01/2000

Published in: Volume 6 - 2000 Issue 2 (pages 6 - 11)

Abstract

The urban land tenure in China is known as ‘land use rights’. Thefirst auction sale of land use rights for private development in Shenzhen in 1987 led to the revival of the property market in China. The problem with assessing land value in China is the lack of market data. In the absence of market data, it is dificult to determine the prices of land use rights using conventional valuation methods. A lot of land use rights were granted to developers at a price determined arbitrarily by the relevant officials. A benchmark pricing system was subsequently implemented to control the problems and guarantee a reasonable return the government. This pricing system has been implemented in major cities. However, in less developed cities, the pricing system has not been established because of the lack of expertise and resources. This paper suggests an alternative method based on the urban land location theory to assess commercial land value in less developed cities. It is found that this method can give an accurate result comparable to that obtained by the capitalisation method.

Download Full Article

Download the Full Article PDF

14445921.2000.11104086.pdf 14445921.2000.11104086.pdf (492kB)

Keywords

Benchmark Pricing System - Land Use Rights - Location Coefficient - Location Theory

References

  • Chan, ?. (1999), Land-Use Rights in Mainland China: Problems and Recommendation for Improvements, Journal of Real Estate Literature, Vol. 7, No. 1, pp 53 – 63.
  • Fisher J.F. & Martin R.S. (1994), Income Property Valuation, Dearborn Financial Publishing, Inc. P 187.
  • Harvey J. (1987), Urban Land Economics, 2 edition, London: MacMillan Education, P 220.
  • Lin, Y.Y. (1995), Real Estate Valuation, Taiwan Chengzhi University Press, pp 100 – 120.
  • State Land Administration (SLA) (1990), Town and Country Land Grading Framework, China: Agricultural Industry Publisher, pp 15 – 20.
  • Walker, A. & Li, L.H. (1994), Land Use Rights Reform and Real Estate Market in China, Journal of Real Estate Literature, Vol. 2, No. 2, pp 199 – 211.
  • Yang, C.G. & Wu, C.F. (1997), Land Use System Reform in China, China: China Land Publisher, pp 50 – 58.
  • Zhou, Z.P., Chen, Z.X. & Chau, Z.J. (1992), A Perspective of the Chinese property Market, Hong Kong: Joint Publishing (H.K.