Residential developer behaviour in land price determination

Abstract

This paper examines residential developer behaviour in the determination of land prices during the late 1980s and 1990s. Drawing upon a representative survey of volume residential developers in England, it is argued that expectations of future trends in housing demand and constrained land supply policies have combined to in ate the price developers are prepared to pay for land, in order to retain a presence in particular housing markets. Empirical observations suggest that the consequences of such actions have led to destabilizing effects upon land price movements, developer pro tability and upon the composition of the wider industry, notably delaying market recovery.

Availability, Affordability and Volatility: The Case of Hong Kong Housing Market

“…19 For the list of developers in Hong Kong, please refer to Appendix 2. 20 For the behavior and price strategy of developers, refer to Henderson and Thisse (1999), Gillen and Fisher (2002) and Ching and Fu (2003).…”

Modelling urban growth: Integrating both physical and human dimensions in developing world context

“…Developers wish to optimise profit through the investment of funds into new residential development at the lowest reasonable cost (Coiacetto, 2000;Gillen and Fisher, 2002). Accordingly, the selection of land reflects the developer's view on occupying the best area for maximising profit.…”

“…The characteristics of the developers in this module were derived from studies in the JMA and complemented with empirical studies from North America, or Australia (Gillen and Fisher, 2002;Kamps, 2013;Mohamed, 2009;Nichols, 2013). The module incorporates three types of developers:…”

“…Furthermore, the amount of capital that developers possess can lead to different locational decisions, land acquisition actions and adaptation strategies, all of which will impact the evolution of urban landscapes (Coiacetto, 2001). However, existing research on developers' behaviour have been primarily concerned with investigating the variation of developers' behaviour due to expectations in future housing prices (Gillen and Fisher, 2002), lot-size variation on infrastructure costs (Mohamed, 2009), or the general structure of the property industry (Coiacetto, 2006a). Although the locational behaviour of developers and how their levels of capital investment impact on their decisions are pivotal in analysing the supply-side economics, such factors have largely been overlooked.…”

“…the centre of urban services or accessibility of an area), influence the existing proportion of land cover (e.g. diminishing green open area), and contribute to the increasing price of land in surrounding areas (Gillen and Fisher, 2002). With such various roles and with the great impact that they have on urban area, the developer is regarded as the key actor on the urban development process (Coiacetto, 2000;Kaiser, 1968;Rudin, 1978).…”