Study On Chinese Urban Land Options System And Land Options Pricing

The land use system reform began in 1980s was quite different from the traditional land use system. It is new and consistent with the market economy. During the passed twenty years, the land use system has been perfecting, while existing several problems, such as granting land with a lower price, don't according to the law and regulations, lacking money and taking high risk in land banking, stocking up lots of land and so on. Option, a right you pay for it with premium and can choose to sell it or not in the future, is a good tool in reducing risks. In this thesis, options are applied in the urban land use system. The adoption of land options system will do help to the urban land market and real estate market. It will make the management of the state-owned asset more efficiently. By analyzing of the problems of the current land system, this thesis discusses the essentiality of the applying the land options. After introducing the options theory, this thesis analyzing the features, functions, content, feasibilities of the land options system under the land banking system and land granting system. The key factor for setting up a well performed land options system is a moderate option price. So, in the last of the thesis, a pricing model, basing on the Black Real Options Model is constructed. It is a theoretical price of land option. This thesis researches into the base price of the land options according to the cost of the land development in the primary land market. Besides, the theoretical land option price will do help to the formation of the balanced, appropriate, fair market price of land options.