Land Market

10 Key excerpts on "Land Market"

• 

  eBook - PDF

  Urban Land Economics

  • Jack Harvey, Ernie Jowsey(Authors)
  • 2019(Publication Date)
  • Red Globe Press

    (Publisher)

  What is the primary function of the real property market? Recommended Reading J. Harvey, Modern Economics, 7th edn (London: Macmillan, 1998) chs 3-5. J. E. Manser, Economics: A Foundation Course for the Built Environment (London, E&FN Spon, 1994). M. Newell, An Introduction to the Economics of Urban Land Use (London: Estates Gazette, 1977) ch. 1. CHAPTER4 The Pricing of Land and Land Resources After studying this chapter you will be able to: • Explain the concept of 'economic rent' • Show how a demand curve for land can be determined • Explain and illustrate how the interaction of demand and supply will lead to an equilibrium market price or rent 4.1 Land as a whole Undeveloped land, or 'pure' land, refers solely to natural resources and space. Thus land as a whole -that is, the earth's land surface -can be regarded as being fixed in supply. Increasing such land by reclamation from the sea involves so much investment of capital that it is more appro-priate to view it as an addition to capital goods rather than to land. This idea of land as a whole being fixed in supply has been important in past discussions of cost and value. With man-made commodities, including capital goods, price is a function of demand and supply and, in so far as supply is influenced by cost of production, price itself is influenced by cost. But since land as a whole is a fixed supply provided by Nature, the earnings of 'pure' land are determined solely by demand. Thus in Figure 4.1 POMN represents the earnings ofland when demand is D, and P1 OML when demand is D1. In fact, however small the earnings, the total supply of land is still the same. We can say, therefore, that its opportunity cost is zero. Hence all the earnings of land as a whole are an 39 40 Real Property Price (£) p 0 s M Quantity of 'pure' land demanded and supplied Figure 4.1 Economic rent excess over opportunity cost.

  Sign up to read

  Learn more about book
• 

  eBook - ePub

  Economics, Planning and Housing

  • Michael Oxley(Author)
  • 2004(Publication Date)
  • Bloomsbury Academic

    (Publisher)

  Chapter 2

  Markets, Development, Institutions and Efficiency

  Throughout the world the development of housing depends on the combined operation of markets and public policy. In detail, markets work in different ways in different social, political and institutional contexts, but they have key elements that pervade a variety of settings. The process of development involves changes in the use of land and buildings that create new built-environment assets. Governments are not content to allow markets to wholly determine this process and the results or outcomes, and they therefore influence these processes through public policy. An important element of such public policy is land-use planning.

  In this chapter we provide a backcloth against which the policy and planning rationale, actions and outcomes of subsequent chapters can be displayed. An essential feature of this backcloth is an examination of how housing and Land Markets might be expected to operate in the absence of planning. This will be done by applying the concepts of mainstream economics to the demand for housing and land and the production of new housing. As explained in Chapter 1 , in mainstream economics individuals and firms trade competitively in markets to maximize utility or individual well-being and to maximize profits. We will examine the role of prices, the nature of explicit and implicit markets, and the problem of determining the boundary of a housing market area.

  An important theoretical strand to the economics of land use and development has been provided by location theories, and some key elements of such theories, their propositions and limitations will be set out. Conceptualizing and modelling location are issues that have challenged economists and planners, and the issues will be explored and the options examined.

  Mainstream economists’ market-orientated analyses of development processes have in recent years been both challenged and supplemented by institutional analysis. Several institutional perspectives will be explored, the nature and role of property market institutions will be examined, and the contribution of an institutional approach evaluated. It will be shown that institutional analysis provides a useful complement to, rather than a substitute for, mainstream economics.

  Sign up to read

  Learn more about book
• 

  eBook - ePub

  Economic Freedom

  Lessons of Hong Kong

  • Kui-Wai Li(Author)
  • 2012(Publication Date)
  • WSPC

    (Publisher)

  12

  Land, Property and Housing

  12.1 Introduction

  Land is regarded as a form of natural resources in economics, and land has been treated differently in different economic freedom regimes. In some free economies, land can be bought and sold privately, and individuals can buy land for their own usage. In other free economies, especially land-constrained economies, the state becomes the owner of all land in the territory, but the government will allot, distribute and sell land for different usages: residential, commercial, industrial and open woodland. In this case, land is purchased or leased from the government for a period that lasts for decades. As such, individuals do not have the ownership right, but have the use right in the acquired land. In either case, individuals and corporations and institutions are free to acquire land for private usage. Rental arrangements are also very common in free economies. Individuals can acquire land resources through rental from the owners.

  The three terms of real estate, housing and properties could mean the same, but would convey different implications between usage and ownership, between necessities and non-necessities, and between investment and speculation. Housing is the term that conveys the provision of an essential, basic and necessity good. Housing could simply provide a shelter to individuals, a basic human need and exclude luxurious considerations. Many governments in free economies pursue a housing policy for the needy and ensure a basic living environment for all.

  Both properties and real estate imply freedom of ownership. In both cases, they carry an element of investment. The owners can either reside in their purchased property or rent it out to collect rental income. The term real estate could give a broader coverage and implies a large piece of land property or a collection of housing properties that could spread over different locations. In most cases, properties and real estates are long-term investments that will generate cumulative returns over the years or decades. In some cases, real estates could be a piece of raw farmland or undeveloped land kept for future development. The ownership of properties and real estates are considered as wealth of an individual or a business corporation, as they provide either a stream of services (by living in the property) or a stream of income (rental income). The wealth from the ownership is realized when the property or real estate is sold in the market. Over time and given a stable economic environment, there would be an asset appreciation to the property.

  Sign up to read

  Learn more about book
• 

  eBook - PDF

  African Land Rights Systems

  • Aquiline Tarimo(Author)
  • 2014(Publication Date)
  • Langaa RPCIG

    (Publisher)

  24 The role of the state should not include distribution of goods and delivery of services. On this account theories that support the free market persuade people to believe that the responsibility of making moral judgments must be left to the free market. This way of thinking has already hijacked healthcare programs, land management systems, labor laws, and market prices. Others believe that the free market is neutral in the way it functions to balance supply and demand. But experience shows that unfettered market does not respect collective interests such as preservation of the environment, rights of small-scale farmers, and decent wage for laborers. Land, from the market viewpoint, is seen as a matter to be exploited to satisfy the needs of human beings. The right to own land as well as determine its usage depends upon the financial status of the person involved in the transaction. 25 The free market, as an exchange of goods that promotes freedom of choice, autonomy, and creativity as a means to increase productivity, strongly advances the notions of commoditization and commercialization of non-market goods. The meaning of land, as I have demonstrated in 61 chapter one, is tied to social relations. The economic function is only one of many functions of land. So, to make the value of land completely dependent on the market value would be to subordinate everything to the value of the market. Claims of commoditization and commercialization of land have somehow distorted the meaning of land. Commoditization is the process by which land becomes an economic commodity controlled by market forces. The situation generates four points of contention: first, land has both economic value and social value; second, land has economic value, but it cannot be limited to economic value only; third, the commoditization of land has ultimately made its market value replace its social value; and fourth, market value can actually replace social value.

  Sign up to read

  Learn more about book
• 

  eBook - PDF

  The Modern Economics of Housing

  A Guide to Theory and Policy for Finance and Real Estate Professionals

  • Randall Pozdena(Author)
  • 1988(Publication Date)
  • Praeger

    (Publisher)

  4 The Market for Land and Improvements The simple economic framework introduced in chapters 2 and 3 makes it clear that the responsiveness of the housing stock supply is a crucial factor in deter- mining the prices in the housing market. Before turning to more complex rep- resentations of the housing market, therefore, it is worthwhile to elaborate on the factors involved in supplying housing. There are four major factors of production that are engaged in the housing supply process: land, labor, capital equipment and materials. In many respects, however, it is the intimate relationship between housing and land that distin- guishes the production of housing services from other goods and services in the economy. The market for land also has unique features that have made it the focus of intense study by economists for centuries. Adam Smith, the great eighteenth-century Scottish philosopher, for example, devoted the largest single chapter of his famous book, The Wealth of Nations, to an analysis of the behavior of the market for land. As we shall see, the stock supply elasticity of housing units is importantly influenced both by the behavior of the market for sites and the improvement through construction of those sites. 48 THE MODERN ECONOMICS OF HOUSING THE MARKET FOR LAND A N D SITES The discussion can be simplified quite a bit if housing can be thought of as having only two components of interest to the housing consumer: the site and the improvements made to the site. If there is an increase in the demand for housing, the reaction of the price of housing will depend upon conditions under which each of these components is supplied. The conditions under which land is supplied differ from most other commodities in two important respects. First, if we define land as an unimproved site, then the supply of land can be thought of as perfectly inelastic with respect to its price, both in the short and long run.

  Sign up to read

  Learn more about book
• 

  eBook - ePub

  The Natural Dividend

  Just Management of our Common Resources

  • Jonathon W. Moses, Anne Margrethe Brigham, Jonathon Moses(Authors)
  • 2023(Publication Date)
  • Agenda Publishing

    (Publisher)

  We see the same political process and variation in outcomes with the creation of new states, or with new regimes in old states. For example, when the state of Israel was founded in 1948, nearly all of its territory was vested in the state and was available only for 49-year, or sabbatical-length, leases. A nearly opposite result can be found in the political rubble that was once the Soviet Union, when President Mikhail Gorbachev introduced a market economy: he reallocated much of the state property acquired under the Soviet Union, and this property became the seed corn for the growth of a new breed of Russian oligarchs. When seen from a larger historical perspective, land tenure regimes tend to ride the political currents.

  In short, the market for land – in practice – is inherently political: control of land is secured by force, and then allocated by political favour. These political roots are often buried under decades and centuries of exchanges, which have subsequently transformed land into something that resembles a commodity. As a consequence, the management of land varies significantly across the globe – and only one continent (Antarctica) remains in a form of common ownership.10 The rest of the planet’s land resources are allocated by national political authorities, which set the parameters for national Land Markets: they decide how to allocate property and how much to keep on (and off) the market, and they decide whether to encourage large or small holdings. In doing so, political authorities determine the relative scarcity of land, and how widely it is distributed.

  The market for land

  This section aims to describe how Land Markets are currently managed, and it is divided into two parts. Land Markets are different from other resource markets in that the enclosure process has largely been completed, and there is already widespread expectation that land can be traded as a commodity like any other (especially in the Global North). Even so, it is important to recognize the continued existence of many different forms of land allocation (including common, public and private). The first part of this section documents that variation. In the second part, we turn to see how value is created in agricultural markets, so that we can better trace the source of the Natural Dividend from land.

  Sign up to read

  Learn more about book
• 

  eBook - PDF

  Economics, Real Estate and the Supply of Land

  • Alan W. Evans(Author)
  • 2008(Publication Date)
  • Wiley-Blackwell

    (Publisher)

  Because of its characteristics the land and property market is not only imperfect and inefficient but the participants in the market lack knowledge of the alternatives available, in particular, of the price they might be able to obtain or the price that they may have to pay. Indeed, as we have suggested, many owners of land may be unaware of its value, since most of those owning land and property are primarily interested in using it and continuing to use it, whether farming the land or occupying the property as a residence, office, or factory. The result is that anyone wishing to buy or sell has to recognise the extent or their lack of informa- tion, or uncertainty by searching the market for those who might be willing to trade, and the price at which they would be willing to do so. It is the economic consequences of this uncertainty which is the main topic of Chapter 12. Given the lack of certainty about the availability of land, the fact that it is not available ‘off the shelf‘ and has often to be sought out and always to be negotiated over, it is inevitable that developers will start looking to buy land before they actually need it. In Chapter 13 we show why developers engage in land banking - the purchase of land some time ahead of devel- opment, and why this process too will be affected by the nature of the planning system in operation. In Chapters 14, 15 and 16 we consider explicitly the problem of contiguity. 10 Introduction We argue that contiguity is demonstrably important and show it affects the process of site assembly. The problem of contiguity, a problem which does not arise in other product and factor markets, explains why governments intervene in the Land Market in a way which would be unacceptable in democratic countries in other markets. In particular governments use powers of compulsory purchase to put together sites for public develop- ment.

  Sign up to read

  Learn more about book
• 

  eBook - PDF

  Room for Development

  Housing Markets in Latin America and the Caribbean

  • Inter-American Development Bank, César Patricio Bouillon(Authors)
  • 2012(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  5 Digging up the Truth about Land Markets F ormal serviced land in Latin America and the Caribbean is too expen- sive and is, therefore, responsible for a number of ills that plague the housing sector—or is it? Unfortunately, many of the voices decrying high land prices lack data to support their opinions. Writing on Land Markets in the region’s cities, Smolka and Mullahy (2000) stress that “there are many misconceptions in the form of myths, prejudices and misinforma- tion that distort seriously the views of well meaning participants in the debate on land policy” (p. xxv). Putting aside the misconceptions and passion surrounding the debate about land in urban areas, three essential questions remain regarding how well Land Markets function in the region. First, are Land Market outcomes contributing to the overall housing gaps in cities in Latin America and the Caribbean? Second, what is conditioning these outcomes, and more specifically, what is the role of regulation? Third, what public policies are needed to improve both the functioning and the outcomes of Land Markets in the region? How Do Land Markets Work? Urban land development is usually driven by demographic and economic growth. Increases in population, changes in household composition, and shifts in economic activity drive the demand for land upon which to locate residential, commercial, industrial, and other activities. By contrast, the demand for agricultural goods drives the demand for rural land. The price of land is strongly influenced by transportation costs (both monetary and time costs). In the case of land used to produce goods or services that are sold to others, the location of production affects trans- portation costs. Even where the use is residential, transportation costs An erratum to this chapter can be found at DOI 1057/9781137031464_11 The original version of this chapter was revised

  Sign up to read

  Learn more about book
• 

  eBook - PDF

  Unmaking China's Development

  The Function and Credibility of Institutions

  • Peter Ho(Author)
  • 2017(Publication Date)
  • Cambridge University Press

    (Publisher)

  Similar to the rural market, the urban Land Market is divided into two levels (see Figure 2.2 above). In the primary market, the use rights to urban land (owned by the state or acquired through expropriation from rural collectives) are assigned to users by commercial and non- commercial methods. In the non-commercial manner, land use rights are “allocated” (huabo) to state or non-profit organizations (e.g., schools, parks, and temples) with no time limits on the lease term and at non- market costs (in certain circumstances, the land tax is waived). In the Owner of urban construction land (city, municipality, county) Owner of rural land (collective) Commercial land user1 (e.g., real estate company) Expropriation Conveyance (fixed term against premium or annual land rent) Allocation (indefinite term against non- market land tax – sometimes waived) Secondary market Paid transfer, rent or mortgage of land use rights Land user2 (e.g., industries, business, banks, residents, etc.) Primary market Non-profit land user (e.g., schools, temples, etc.) Land user3 (e.g., industries, business, banks, residents, etc.) Figure 2.2 Institutional structure of the urban Land Market Source: Illustrated by author 48 An example of this is provided in Appendix J in Ho (2005). 76 In Defense of Endogenous Development: Urban & Rural Land Markets

  Sign up to read

  Learn more about book
• 

  eBook - ePub

  Property, Planning and Protest: The Contentious Politics of Housing Supply

  • Quintin Bradley(Author)
  • 2023(Publication Date)
  • Routledge

    (Publisher)

  2 Land as a Financial Asset

  DOI: 10.4324/9781003264507-2

  The ubiquitous narrative that building more homes will bring down the cost of housing serves to justify the deregulation of property rights and the removal of democratic scrutiny from land-use planning. The fallacy that land is a commodity like any other underpins this supply-side story, but the models of a self-regulating market fail to accurately describe the material practice of real estate development. Many academics have turned to classical rent theory in response, particularly noting its effective application to fathom previous financial bubbles in housing and Land Markets. In this chapter, I investigate the strategies of corporate landowners and housebuilders through Marxian rent theory to focus on the monopoly relations of private property ownership. This inquiry reveals an economy in which land is valued for its financial returns rather than its productive use and is diverted from social need for the benefit of investment markets. Landowners and developers routinely exploit monopolies to withhold land and create artificial scarcity in housing supply. The affordability crisis in housing is a direct result of the exercise of monopoly power in the real estate industry and a financial bubble in land speculation abetted by the deregulation of land-use planning.

  Supply-Side Stories

  House prices rose at their fastest rate for over 30 years in OECD countries in 2021, when I was writing this book, surpassing even the inflated values seen prior to the global financial crash (OECD Affordable Housing Database, 2021 ). Managing the fallout from ever-rising house prices has become a policy conundrum for governments wedded to the promotion of homeownership as asset-based welfare. If the expectation of homeownership continues to decline and the asset touted as the replacement for the welfare state is seen to be out of reach, then political instability cannot be far behind. The universally proclaimed solution to these affordability problems is higher rates of private housebuilding. In this globally pervasive narrative, land-use planning is branded an obstacle to housing growth. Advocates of an interventionist planning system are held responsible for high house prices. From Australia to Britain, national, federal, and state governments have ripped up land-use regulation, fast-tracked planning decisions in favour of development, and scuppered democratic engagement in decisions about housebuilding. A more lightly regulated market in land, they argue, will lead to an increase in homes built and bring about a corresponding drop in house prices, so the story goes. The debate over housing supply and affordability has become notably toxic, and no reasoned argument can change the opinions propagated by proponents of this supply-side story. This is all the more remarkable since their views are rejected by most economists, and their theories fail to explain everyday practices in real estate markets (Mulheirn, 2021

  Sign up to read

  Learn more about book