Government Performance,House Price And Urban Economy Under Monopoly Of Land Supply

Chinese real estate market has it's own particularity that the land supply is controlled by government. So it is important to take monopoly of land supply into account when doing some research about Chinese real estate. This paper focuses on the interaction in government performance, real estate market and urban economy. Under monopoly of land supply, government is inclined to decrease the supply of land to get more income, and the housing price will get higher. More over, the government performance of land supply will influence people's price anticipation. If people anticipate price will rise, price will get even higher.The decreasing of land supply will impact the urban economy. The housing price rising increase the production cost, so that the gross product is likely to decline. The housing price rising also increases people's living cost.More finance income and urban economy development, people's higher living standard are all the goals of government. So government must balance in all these goals.Under monopoly land supply, the probability of "Bubble" is higher. It is a challenge for Chinese government to cope with real estate bubble.