Analysing land price patterns

Land usage planning is really much of import for physical planning of an country and land monetary value is the most critical issue of any physical planning. To the classical economic expert land is defined as being all the free gifts of nature which yield an income. Balchin and Jeffrey ( 1977 ) frequently found land and capital so mutualist that separate designation may either be impossible or inconvenient. The monetary value of developed Land is an of the most of import cost facet of the monetary value of a rent. Normal conditions and factors that influence land monetary values in the free market include location, propinquity and handiness, substructure development cost, productiveness, form and size of the packages and the demand for land. ( Pinging Ai March, 2005 ) . In urban country alteration in land monetary value in every twelvemonth has became a common phenomena. Changes in land monetary values were determined by calculating the differences in land monetary values for tonss. The land monetary value alteration is influenced by many factors. The chief factor responsible for the land monetary value, chief focal point of this survey, is the distance of the Central Business District ( CBD ) from the land.

Model is a simplification of world which takes the theoretical abstractions and puts it into a signifier that we can pull strings. Von Thunen Model is one of them. We use this theoretical account to specify the alteration in land monetary value with the distance of CBD.

Land monetary values forms, are complex due to its constitutional spacial form. The analysis of the spacial form of land monetary values is of critical importance for planning, development and land direction issues. Land has economic, environmental, historic, and societal values. ( Pinging Ai, 2005 )

The monetary value of land is dependent on the location, quality and the installations available to the environing countries of land. ( Alauddin Ahmed, 2005 )

Land value act uponing factors can be loosely classified into four classs:

Social factors,

Economic Factors,

Legal, governmental and political factors,

Physical, environmental and locational factors. ( Tuladhar, 2002 )

In the physical factor the chief variables are-

National main road

Market topographic point

Suitable country for concern

But these factors are identified in the wide graduated table. For some restrictions of the survey, with the aid of these literatures, the chief factor which is act uponing the land monetary value can be identified and described with the aid of Von Thunen Model.

The factors with which we are traveling to work are-

Location of the land & A ;

Distance of the CBD country.

Von Thunen Model:

Locational rent, a term used by von Thunen in his statement, is to be understood as the equivalent to set down value. It corresponds to the maximal sum a husbandman could pay for utilizing the land, without doing losingss. It can be defined as the equation below:

L = Y ( P a?’ C ) – YDF

Here,

L= Locational rent ( in DM/km2 )

Y= Yield ( in T / km2 )

P= Market monetary value of the harvest ( in DM / T )

C= Production cost of the harvest ( in DM / T )

D= Distance from the market ( in kilometer )

F= Transport cost ( in DM / T / kilometer )

In 1826, Von Thunen suggested that, around a market centre the rent paid for agribusiness land plus the cost of transporting agricultural merchandise from the land to the market would be a changeless value. At the border of development, rent would be zero and the entire cost incurred to the manufacturer would be equal to the conveyance cost to the market.

Examples:

Take the locational rent of a merchandise with a output of 1,000 Ts / km2, for illustration, with a fixed monetary value of 100 DM/t in the market. Production and conveyance costs are severally, 50 DM/t and 1 DM/t/km. The locational rent is 50,000 DM/km2 at the market, 40,000 DM/km2 10A kilometer from the market and merely 20,000 DM/km2 30A kilometer from the market. Since locational rent falls with increasing distance from the market, the sum each husbandman is willing to pay for agricultural land will shrivel and the monetary value of land will finally worsen ( Von Thunen, 1966 ) .

Execution of the Model:

Von Thunen Model was originally concerned with the location of the market topographic point. From this theoretical account it is possible to find the land monetary value. In Bangladesh the chief market topographic point is the CBD country. The business communities prefer to turn up closer to the metropolis, as their net income will be higher. Thus for land closer to the CBD country, they are willing to pay a rent, the land rent, which is at most the net income they make at that location. For this the land closer to the CBD country will hold a higher monetary value than land that is located farther from the CBD country. From this it can be defined that land rent at a location will be equal to the local net income:

R = Y * ( P-Cp ) – Yttrium * ( Ct * vitamin D )

Here,

R = land rent ( Tk/acre )

Y = output ( ton/acre )

P = market monetary value ( Tk/ton )

Cp = production cost ( Tk/ton )

Ct = transit cost ( Tk/ton/miles )

vitamin D = distance from town ( stat mis )

To acquire the maximal net income people tend to populate near to the Center market topographic point. For this the demand of the land near to the market is greater than the land located farther from it. This influences the alteration in land rent. The monetary value of developed land is an of the most of import cost facet of the monetary value of land rent.

With the aid of Bid Rent Curve this construct can understand more clearly –

From the curve it is clearly seeable that the monetary value of the land per M2 alterations with the distance of the Central Business District ( CBD ) . Because different land users will vie with one another for land which is near to the centre market. This is based upon the thought of the Von Thunen Model. Harmonizing to the theoretical account retail and whole sell constitutions wish to maximise their profitableness, so they are much more willing to pay more money for the land near to the CBD and less for land farther off from this country. Because harmonizing to the Von Thunen Model it is clear that the more accessible an country, the more profitable.

The chief intent of this survey is the application of theoretical account in planning. Von Thunen Model is really utile in the planning sector. It is possible to find land rent through this theoretical account and lend rent is one of the chief influencing factors of altering in land monetary value. Again alteration in land monetary value is a really of import portion of physical planning. By uniting the Von Thunen Model with alteration in land monetary value with the distance of CBD, it became easy to deduce the land monetary value of any country which will turn out really helpful for a contriver.