ABSTRACT
The urban land market operates to allocate land to buyers, through which the city built environment is adjusted according to land price, the quantity of land supplied, the quantity of land demanded, and land-use planning policies. The urban development outcome – spatial structure, density, property price, and even the cost of production – is thus greatly shaped by its land market, which in turn is complicated by its socio-economic and political structure. In a free market economy, the land market provides for the exchange of land between buyers and sellers in a competitive way. Dowall (1993a: 3) identifies six characteristics of a perfect competitive and efficient market, i.e. well-defined property rights, voluntary participation, a multitude of buyers and sellers, free entry and exit, perfect information, and similarity of product. A competitive land market is driven by both demand and supply factors; and the interaction of both factors determines land price (Serra et al. 2004). Land demand is created by population growth, income, and level of economic activities, while on the supply side, physical conditions, land ownership, infrastructure availability, and government policies and regulations determine how much land is supplied to support development.
