Land and House Price Measurement in China

Wharton Author: Joseph Gyourko [with Yongheng Deng, Natl. Univ. of Singapore; Jing Wu, Tsinghua Univ. & Natl. Univ. of Singapore]

This paper reports the first results and summary statistics on conditions in Chinese land markets using new data based on auction sales from 2003-2010 in 35 major cities. The typical market has experienced double-digit compound annual growth in real values on average in the last eight years. Three notable characteristics about the land value appreciation series are its strong mean reversion at annual frequencies, the strong common factor in its movement, and its very high volatility. We also investigated the quality of the two most prominent house prices indexes in China, and concluded that a traditional hedonic index would more accurately reflect how house prices have changed over time in eight major markets in China. We believe these data will serve as the foundation for much broader and in-depth future work on Chinese land and housing markets.