Valuation of Commercial Land in Less-Developed Cities in China

AbstractThe urban land tenure in China is known as ‘land use rights’. Thefirst auction sale of land use rights for private development in Shenzhen in 1987 led to the revival of the property market in China. The problem with assessing land value in China is the lack of market data. In the absence of market data, it is dificult to determine the prices of land use rights using conventional valuation methods. A lot of land use rights were granted to developers at a price determined arbitrarily by the relevant officials. A benchmark pricing system was subsequently implemented to control the problems and guarantee a reasonable return the government. This pricing system has been implemented in major cities. However, in less developed cities, the pricing system has not been established because of the lack of expertise and resources. This paper suggests an alternative method based on the urban land location theory to assess commercial land value in less developed cities. It is found that this method can give an ac...