The impacts of housing purchase restriction policy on residential land supply in China

Abstract

Analyzing the impact of the housing purchase restriction policy on residential land supply is crucial for land and real estate market regulation. Although numerous studies have investigated the impact of the purchase restriction policy on the real estate market, there is relatively less research on their effect on the land transfer market. Herein, we examined the impact of the purchase restriction policy on the real estate market and the land grant market through the“price-volume” dimension using a panel of 273 cities from 2004 to 2018 in China. The results are as follows: (1)purchase restriction policy can have a significant impact on the real estate supply market (land grant market) in China; (2)the impact of the purchase restriction policy on the number of land sales is significantly negative, but there is a difference in the impact on the price of land sales; (3)the impact of the purchase restriction policy on the reduction of the number of land grants and the increase of the price of land grants is extremely significant in first-tier cities, with decreasing effects on second- and third-tier cities decreases in turn; (4) the purchase restriction reduces the number of land sales most strongly and lifts the price of land grants the most in the eastern city in China. The policy effect was significantly weakened in the central and western regions. In the western region, the purchase restriction even hit the land supply market, with a significant negative impact on both the volume of land sales and the price of land sales.