Housing Price, Land Supply and Revenue from Land Sales

Raymond Y. C. Tse
Additional contact information
Raymond Y. C. Tse: Department of Building and Real Estate, Hong Kong Polytechnic University, HungHom, Kowloon, Hong Kong, bsrtse@polyu.edu.hk.

Urban Studies, 1998, vol. 35, issue 8, 1377-1392

Abstract: In a recent study, Peng and Wheaton empirically examine the effect of restrictive land supply on Hong Kong house prices. However, we argue that the impact of the supply of new land by the Hong Kong government is not as important as they maintain in accounting for the volatile house prices in Hong Kong. We show that there is no causal relationship between land supply and housing prices. Our estimations, based on the annual data of Hong Kong's public land sales, find that the government acts to maximise land revenue. Maximisation of revenue from land sales is, however, consistent with the efficient allocation of resources. We also show that the amount of land sales by the government and land in developers' land banks tend to decrease when market interest rates increase. Land banking behaviour is governed by economic conditions. Long-term land holding costs should cover interest costs.

Date: 1998
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1080/0042098984411 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:urbstu:v:35:y:1998:i:8:p:1377-1392

DOI: 10.1080/0042098984411

Access Statistics for this article

More articles in Urban Studies from Urban Studies Journal Limited
Bibliographic data for series maintained by SAGE Publications ().