With the rapid development of urbanization, it brings the real estate market good opportunities for development. Since the national housing prices and sales continued to grow in the in the last few years, facing of rapid increases in housing prices, many people thought this phenomenon comes from the changes in land policy, which leads to the change of the land prices. However, it was stated, for others, that is caused by high prices of land prices. This article focuses on the hot topic of relationship between land prices and housing prices. The analysis of the proportion relationship between land prices and house prices was carried out based on market prices of land prices and house prices in Taiyuan city, in the light of proportion relationship between land prices and house prices in some foreign cities and domestic urban, and via the statistical analysis of composition, taxes and fees, and real estate development-related profits of residential land prices sold different ways in Taiyuan City. Results showed that the land price is an important component of housing price, but not equivalent to causation. And changes in the level of prices were determined by market demand and changes of investment-oriented concepts.
