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Since 2004, two auction mechanisms – listing auctions and tender auctions – have played a dominant role in land lease arrangements for real estate development in Beijing. Listing auctions in land markets are similar to general English auctions, where bidders offer the highest price to win. However, in tender auctions, winners are determined by the bidding price and the bidder’s financial capability and reputation. Based on granted land parcels from 2006 to 2012 in Beijing, this paper attempts to examine the price differences between the two auctions and the role of land auction in urban development and price stabilisation. We find that land policy in Beijing, which aims to stabilise land prices and to provide low-price residences, has been integrated with urban development planning in terms of spatial and density pattern. Land leasing in Beijing is not only a land policy but also a part of the strategy framework of local development. [ABSTRACT FROM PUBLISHER]

The fact that local governments rely heavily on land finance has fostered the emergence of "land lease price champion" in many cities across the country through land auctions and land auctions are most likely to cause excessive land auction premium. This paper focuses on residential and commercial land lease transactions in Beijing for a period from 2003 to 2010 and studies the driving forces of the observed land auction premium using hedonic pricing methodology. Results show that land use purpose, floor-to-site ratio, location, the type of land bidder and distance to city center significantly impact the land auction premium. Comparing with private real estate companies, state-owned real estate firms exert more impact on land auction premium. Another finding is that part of the stimulus package released in 2009 to cope with the economic crisis has been directed to land market through state-owned real estate firms that pushes up the land prices. [ABSTRACT FROM AUTHOR]