The Study About The Impact Of FAR To The Efficiency Of Urban Real Estate Market

Now, the rapid process of urbanization in China requires a lot of land, but the land resources in China is scare; urban residents have huge psychological desire for purchasing houses, but a large number of residents can not buy houses for the high prices. To promote the sustainable development of China’s economy, we must improve land use efficiency, solve the contradiction between supply and demand in the real estate market. From the perspective of FAR, this paper analyzed the impact of FAR on the cost of land in building project, that is on urban land price and on substitution between land and capital, defined the judgment criteria of operational efficiency of urban real estate market, pointed out FAR affects the efficiency according to two ways:FAR affects the cost of land in building project, that is affects urban land price, thus affects the supply and demand of urban land; FAR affects the substitution between land and capital, thereby affects the transmission mechanism between urban land price and housing price. In the end, this paper made a few proposals from the perspective of FAR according to assumed condition in the paper to improve the operational efficiency of urban real estate market.