The Impact Of Land Finance And Local Government Debt On Housing Price

In recent years,China's housing prices have continued to rise.By the end of 2018,China's commodity housing prices were as high as 8,544 yuan / square meter,while the average price of first-tier and second-tier cities was higher.The high price of housing is the most prominent problem in many cities in China.It has affected the residents' "living and working" and social sustainable development issues,and has had a profound impact on social stability.Although the central government has introduced a series of housing price control policies,the results are not satisfactory.At the same time,the “high debt” and “land-based wealth” of local governments have gradually become hot issues in contemporary society.The local government factors behind the rise in housing prices have gradually attracted the attention of scholars.In this context,from the perspective of local government behavior,this paper incorporates land finance and local government debt into the research on the mechanism of housing price fluctuations,correctly clarifies the relationship between land finance and local government debt,and discusses its impact on housing prices.Therefore,the influence of each variable on housing prices is investigated in a broad sense,which helps to understand the mechanism of local government behavior affecting housing prices in China,and lays a good theoretical foundation for studying the real problem of “returning rationality in housing prices”.Based on the data of 35 large and medium-sized cities in China from 2005 to 2016,this paper constructs a simultaneous equation model to analyze the internal linkage between land finance and local government debt,and to explore the fluctuation of housing prices from multiple angles.This study finds that there is a mutual promotion and mutual causal relationship between land finance and local government debt,and land finance and local government debt will also lead to rising house prices.The role of land finance in promoting local government debt is greatest in the western region,followed by the eastern region and the central region.Conversely,the promotion of local government debt to land finance is increasing in the eastern,central and western regions,which may be due to the government's implementation of different land supply policies.Further research found that there are significant regional differences in the impact of land finance and local government debt on housing prices.On the one hand,land finance significantly promoted the rising of housing prices in the eastern and central regions,while in the western region,it significantly inhibited the rise in housing prices.The difference may be related to the geographical difference of China's land supply policy;on the other hand,the effect of local government debt on housing prices is weakened in the east,middle and west,which may be related to the local debt use and economic development of each region.Compared with the eastern region,local debts in the central and western regions are mostly used for industrial construction,and the promotion effect on the commercial housing market is not strong.This difference just reflects the imbalance of regional economic development in China.Therefore,it is necessary for local governments to adjust the scale of land transfer and regulate the behavior of borrowing,so as to effectively promote the steady and healthy development of the real estate industry.In order to curb the rise in housing prices,from the perspective of local governments,the following measures must be taken: Firstly,the reform of the tax-sharing fiscal system must be accelerated,and establish a system in which local government powers and expenditures are matched,and reduce the dependence of local governments on land finance;Secondly,the official promotion assessment should include “debt risk” and “repayment ability” indicators,and is no longer only based on GDP;Thirdly,regulate the local government's debt-issuing behavior,control the scale of local government's debt,and strengthen approval and supervision of government debt expenditures at all levels;Fourth,steadily advance the legislative process of the real estate tax,and carry it out as soon as possible nationwide.