International Real Estate Review

1998 ◽  
Vol 1 (1) ◽  
pp. 64-80
Author(s):  
Jia He ◽  
◽  
Ming Liu ◽  
Keyword(s):  
Hong Kong ◽  
Interest Rate ◽  
Real Estate ◽  
Seasonal Pattern ◽  
Property Market ◽  
Mortgage Loans ◽  
Adjustable Rate ◽  
The Interest Rate

A study on the prepayment behavior of Hong Kong mortgage loans is conducted. With all of the loans as adjustable-rate mortgages (ARMs), we find that 1) Prepayment speeds up and then slows down as the mortgage seasons; 2) Prepayment speeds up as the rate markup decreases; 3) Prepayment speeds up as the interest rate increases; 4) Prepayment speeds up when the profitability ratio of the banks ( the prime-HIBOR spread) is higher; 5) Prepayment speeds up as the price of the property market falls; 6) Prepayment speed is faster for loans with a lower loan-to-value ratio; 7) Prepayment exhibits a seasonal pattern: people tend to prepay in the summer.

Crawford Development Co. and Southeast Bank of Texas

2007 ◽  
pp. 1-10
Author(s):  
Anton Ovchinnikov ◽  
Elena Loutskina ◽  
Casey Lichtendahl ◽  
Jayson Lipsey ◽  
Brian Burke
Keyword(s):  
Interest Rate ◽  
Real Estate ◽  
Financial Crises ◽  
Mortgage Market ◽  
Commercial Development ◽  
Residential Market ◽  
The Interest Rate ◽  
To Receive ◽  
Real Estate Financing

In the early months of the 2007-08 financial crises, a loan manager faces a real estate financing decision. Should he approve a bullet structure three-year loan to a longstanding client, a legendary Texan developer? The developer, who near retirement downsized his business, is seeking financing for his only project: residential or commercial development on an attractive piece of land in suburban Houston. The loan manager considers the decision in light of the mortgage market turmoil, seeing commercial projects as safer, but also factoring that the residential market could bring higher returns if the market stabilizes soon. The manager collects the data and asks an analyst to assess the risks; that ultimately requires assessing the economics of both projects from both the bank’s and the developer’s perspectives. The bank could still change the interest rate on the loan to receive adequate compensation for the risk it carries, but the loan manager knows that doing so will change their long-term client willingness to take on the loan.

scholarly journals International Real Estate Review

2010 ◽  
Vol 13 (1) ◽  
pp. 1-29
Author(s):  
Sam K. Hui ◽  
◽  
Alvin Cheung ◽  
Jimmy Pang ◽  
◽  
...  
Keyword(s):  
Hong Kong ◽  
Real Estate ◽  
Statistical Method ◽  
Bayesian Approach ◽  
Investment Decisions ◽  
Average Price ◽  
Residential Real Estate ◽  
Property Market ◽  
Residential Properties ◽  
Expert Assessments

We have developed a statistical method for the valuation of residential properties using a hierarchical Bayesian approach, which takes into consideration the unique structure of the Hong Kong property market. Our model is calibrated on a dataset that covers all residential real estate transactions in ten major Hong Kong residential complexes from February 2008 to February 2009. Although parsimonious, our model outperforms other valuation methods that are based on average price-per-square- feet or expert assessments. By providing our model-based valuations online without charge, we hope to improve transparency in the Hong Kong housing market, thus enabling consumers to make better investment decisions.

Crawford Development Co. and Southeast Bank of Texas

2017 ◽  
pp. 1-10
Author(s):  
Anton S. Ovchinnikov ◽  
Elena Loutskina
Keyword(s):  
Interest Rate ◽  
Real Estate ◽  
Financial Crises ◽  
Mortgage Market ◽  
Commercial Development ◽  
Residential Market ◽  
The Interest Rate ◽  
To Receive ◽  
Real Estate Financing

In the early months of the 2007-08 financial crises, a loan manager faces a real estate financing decision. Should he approve a bullet structure three-year loan to a longstanding client, a legendary Texan developer? The developer, who near retirement downsized his business, is seeking financing for his only project: residential or commercial development on an attractive piece of land in suburban Houston. The loan manager considers the decision in light of the mortgage market turmoil, seeing commercial projects as safer, but also factoring that the residential market could bring higher returns if the market stabilizes soon. The manager collects the data and asks an analyst to assess the risks; that ultimately requires assessing the economics of both projects from both the bank's and the developer's perspectives. The bank could still change the interest rate on the loan to receive adequate compensation for the risk it carries, but the loan manager knows that doing so will change their long-term client willingness to take on the loan.

A Tale of Two Properties: Debt Strategies for Financing Commercial Real Estate

2019 ◽  
pp. 1-19
Author(s):  
Craig Furfine
Keyword(s):  
Interest Rate ◽  
Real Estate ◽  
Interest Rates ◽  
Commercial Real Estate ◽  
Debt Financing ◽  
Shopping Centers ◽  
Opportune Time ◽  
The Interest Rate ◽  
Retail Shopping

Stanley Cirano owns two retail shopping centers in suburban Chicago. With interest rates near all-time lows in late 2015, Cirano believed it was an opportune time to consider the debt financing of his properties. Although the properties were similar in many respects, the lenders willing to lend against each property were offering noticeably different terms. Cirano had to consider not only the interest rate and size of each potential loan, but also the various fees, potential prepayment penalties, and variations in recourse to make the best decision for each property.

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