Studies On How Do Expectations Affect Urban Residential Land From Developers’ Perspective

The real estate market has been developing rapidly since1998, when theChinese government began to implement market-oriented reforms of urbanhousing system. In this circumstance, market rigid demand, investment demandsfor housing were greatly increased. Thus leading to the increasing demand for theurban land from the developers in order to satisfy the housing market. But theperformance of land market and housing market was not synchronized, forexample, the house price was stable in2011, but there were not much landconclude a transaction; on the other hand, in the year2013which was called themost stringent regulation in history, the land market was unusually hot. Based onsuch social background, this paper hypothesized that the developers bid for thepurpose of enterprise or the profit maximization, and their decisions wereinfluenced by their expectations typically. This paper analyzes and validates thishypothesis from the theoretical and practical aspects.Firstly, the author widely read and organizes the domestic and foreignliteratures to know about the current research situation about the land price, andthe practical use of expectations theory in the real estate market. Secondly, theauthor makes a conclusion that the Chinese real estate market is between theadaptive expectations and rational expectations based on the expectation theoryand the current situation. Meanwhile the developers are much rational t han themarket because of their profession and multiple information. Thirdly, the factorswhich infect the land price are divided into three categories, the macro, micro andthe other; then the theoretical models are established form the macro and microlevels respectively base on the analysis of the formation process of land price inthe developers’ view. Finally, made empirical analysis based on the theoreticalmodel.The macro model take the land price of the35cities of Chinese in10years asa research objective. Among these entire factor which infect land price,9wereselected include the developers’ expectation on the house price and the urbansprawl. Judging from the results, house price expectation increases1unit and theland price increase9.62%, while the people in the city increase10thousand, theland price increase15.1Yuan. The micro model takes Chongqing as a researchobjective; four districts of Chongqing are selected to conduct the research for thehave much more land transactions from2012to2014.Judging by the hedonicmodel,the results showed that house prices and population growth is expected to have a positive impact on price of urban residential land, and the impact is not thesame in different regions.