Demand Uncertainty, Development Timing and Leasehold Land Valuation: Empirical Testing of Real Options in Residential Real Estate Development

2014 ◽  
Vol 42 (4) ◽  
pp. 829-868 ◽  
Author(s):  
Huimin Yao ◽  
Frederik Pretorius
Keyword(s):  
Real Estate ◽  
Real Options ◽  
Demand Uncertainty ◽  
Real Estate Development ◽  
Empirical Testing ◽  
Residential Real Estate ◽  
Land Valuation

scholarly journals International Real Estate Review

2021 ◽  
Vol 24 (1) ◽  
pp. 1-17
Author(s):  
Yongqiang Chu ◽  
◽  
Tien Sing ◽  
Keyword(s):  
Real Estate ◽  
Real Options ◽  
Demand Uncertainty ◽  
Market Volatility ◽  
Real Estate Development ◽  
Demand Shock ◽  
Inverse Effect ◽  
Option Values ◽  
Empirical Tests ◽  
The Cost

Developers make decisions around timing and intensity simultaneously when exercising a development option. Built on the early real options models, we allow the demand shock and the cost functions to be dependent on the intensity of real estate development. Based on a set of input parameters, the numerical results show that demand uncertainty delays development activities, and the rental elasticity to density change has an inverse effect on the deferment option values. In a market where the intensity impact on rental income is small, development activities are likely to be curtailed when market volatility increases. More empirical tests could be conducted on whether more smaller-scale projects are triggered in down markets relative to up markets.

Estimation of Risk-Return for Real Estate Investments by Applying Ellwood’s Model and Real Options Analysis: An Application to the Residential Real Estate Market of Naples

2014 ◽  
Vol 651-653 ◽  
pp. 1570-1575 ◽  
Author(s):  
Vincenzo del Giudice ◽  
Alfredo Passeri ◽  
Pierfrancesco de Paola ◽  
Francesca Torrieri
Keyword(s):  
Real Estate ◽  
Real Options ◽  
Financial Analysis ◽  
Real Estate Market ◽  
Residential Real Estate ◽  
Real Options Analysis ◽  
Risk Return ◽  
Real Estate Investments ◽  
Capitalization Rate ◽  
Financial Income

In the present study was developed an application of a model derived from Ellwood’s financial analysis and Real Options Analysis for estimating the risk-return in the residential real estate market of Naples. With the aim of reducing the uncertainty related to the determination of the risk and return for an property investment, starting of real estate investment layout derived from the Ellwood’s model, latter defined by financial income and costs related to the period of property availability, a risk analysis with Real Options Analysis has been implemented, in order to obtain the evolution of the investment value until the year in which it is convenient to recover the initial capital. This model has allowed to determine a capitalization rate for a general area of reference, that it can adapt on further effects of specific factors and intrinsic characteristics of the property being valued. It also allows to define uniquely the investment duration, in terms of availability period of property.

Impacts of property taxation on residential real estate development

2013 ◽  
Vol 22 (1) ◽  
pp. 45-53 ◽  
Author(s):  
Richard W. England ◽  
Min Qiang Zhao ◽  
Ju-Chin Huang
Keyword(s):  
Real Estate ◽  
Real Estate Development ◽  
Residential Real Estate ◽  
Property Taxation

scholarly journals A Real Options Model with Games Applied to the Rio de Janeiro Residential Real Estate Market

2019 ◽  
Vol 21 (1) ◽  
pp. 118-135
Author(s):  
Glaudiane Almeida ◽  
Marco Antonio Dias ◽  
Luiz Eduardo Brandão ◽  
Carlos Samanez
Keyword(s):  
Real Estate ◽  
Real Options ◽  
Rio De Janeiro ◽  
Real Estate Market ◽  
Residential Real Estate

scholarly journals Prospects for the implementation of real estate development in Ukraine based on energy efficiency principles and the problems with raising the finance required

2018 ◽  
pp. 5-15
Author(s):  
Lyudmila Swistun ◽  
Taina Zavora ◽  
Yuliia Khudolii
Keyword(s):  
Energy Efficiency ◽  
Real Estate ◽  
Energy Efficient ◽  
Energy Savings ◽  
Thermal Protection ◽  
Housing Stock ◽  
Real Estate Market ◽  
Point Of View ◽  
Real Estate Development ◽  
Residential Real Estate

The main goal of the study is to analyse the residential real estate market in Ukraine from the point of view of the need and the possibility of increasing its energy efficiency. Also, it aims to justify effective financial and credit mechanisms for ensuring measures to improve the thermal protection properties of residential and non- residential real estate, in particular by introducing energy efficiency development projects. With this research we investigated Ukraine's housing stock and utility tariffs and concluded that a beneficial strategy to be applied in Ukraine is the energy-efficient retrofit of real estate. This is one of the most effective ways to re-profile unclaimed real estate units in the existing state or to reconstruct inefficiently used buildings. Also, we reviewed selected methods of energy efficient residential real estate development and mechanisms of financing energy- efficient renovation of real estate used in the EU. And, in our view, the next step of the Ukraine in the direction of improving the energy efficiency of housing should be the effective operation of a dedicated/specific energy efficiency fund to ensure stable financing of housing modernization projects, which will allow for a comprehensive renovation of buildings and lead to significant annual energy savings in this end-use sector.

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