An Investigation of Urban Land Valuation Methods and Accuracy in China

Student thesis: Doctoral Thesis

Abstract

Real estate valuation is a complex task acknowledged for its inability to reach pinpoint accuracy due to the inefficiency of real estate markets. This can lead to market uncertainties, bringing difficulties in predicting market movement and the associated transaction price. An accurate valuation still plays an indispensable role in maintaining a sustainable market pricing mechanism and forms a crucial area of debate among scholars and policymakers. In transitional countries where vacant land plots are being released each year, accurate land valuation is of critical importance to ensure the market develop sustainably.
This thesis contributes to existing knowledge by investigating real estate valuation (in)accuracy in the transitional market of China, focusing specifically on development land. In China, the government adopts a Land Benchmark Price (LBP) to serve as a price reference point to sell land rights, due to the lack of market transaction data. Given the influence of government regulations on the Chinese land market, this thesis provides an empirical investigation into the assessment of the valuation performance of LBP.
The analysis demonstrates dynamic relationships in explaining variations between market transaction price and LBP valuation, resulting in significant valuation differentials across three land sectors in Beijing. Temporal analysis evaluates the degree of valuation-transaction cointegration over time, and spatial analysis of locational attributes are examined to provide a theoretical basis for the subdivision of the land market, to serve as the foundation of LBP method and assist a more regular updated frequency of LBP. The research concludes by suggesting new update timeframes and locational factors to be incorporated under an amended LBP system for each land type in China. The conclusions provide government administrators and practising valuers an enhanced valuation method to improve accuracy and ensure an efficient price mechanism in the Chinese land market.
Date of AwardJun 2020
Original languageEnglish
SponsorsVice Chancellor's Research scholarship
SupervisorJasmine Lay-Cheng Lim (Supervisor) & Lesley Hemphill (Supervisor)

Keywords

  • Time series analysis
  • Spatial analysis
  • Land use right
  • Land benchmark price

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