Abstract
We are currently witnessing a boom in the real estate industry worldwide, and presale investing (or “Buying Off Plan”, as it is known in Europe) is increasingly popular. This paper conducts a pricing model based on the real option method to assess presale houses. This paper takes into account the ded uctible margins (option premium) and the tax factor to capture the most important characteristics of real-world presale system in house trading markets. This paper finally proposes a closed-form solution for the price of presale house. Simulation results and sensitivity analyses are also examined. The proposed model would help investors to predict and determine the presale house investment.
| Original language | English |
|---|---|
| Pages (from-to) | 143-158 |
| Number of pages | 16 |
| Journal | Romanian Journal of Economic Forecasting |
| Volume | 18 |
| Issue number | 1 |
| Publication status | Published - 2015 Jan 1 |
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All Science Journal Classification (ASJC) codes
- Economics, Econometrics and Finance(all)
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Forecasting prices of presale houses : A real option approcach. / Wu, Ming Cheng; Lin, I. Cheng; Huang, Yi Ting; Chang-Rong.
In: Romanian Journal of Economic Forecasting, Vol. 18, No. 1, 01.01.2015, p. 143-158.Research output: Contribution to journal › Article
TY - JOUR
T1 - Forecasting prices of presale houses
T2 - A real option approcach
AU - Wu, Ming Cheng
AU - Lin, I. Cheng
AU - Huang, Yi Ting
AU - Chang-Rong,
PY - 2015/1/1
Y1 - 2015/1/1
N2 - We are currently witnessing a boom in the real estate industry worldwide, and presale investing (or “Buying Off Plan”, as it is known in Europe) is increasingly popular. This paper conducts a pricing model based on the real option method to assess presale houses. This paper takes into account the ded uctible margins (option premium) and the tax factor to capture the most important characteristics of real-world presale system in house trading markets. This paper finally proposes a closed-form solution for the price of presale house. Simulation results and sensitivity analyses are also examined. The proposed model would help investors to predict and determine the presale house investment.
AB - We are currently witnessing a boom in the real estate industry worldwide, and presale investing (or “Buying Off Plan”, as it is known in Europe) is increasingly popular. This paper conducts a pricing model based on the real option method to assess presale houses. This paper takes into account the ded uctible margins (option premium) and the tax factor to capture the most important characteristics of real-world presale system in house trading markets. This paper finally proposes a closed-form solution for the price of presale house. Simulation results and sensitivity analyses are also examined. The proposed model would help investors to predict and determine the presale house investment.
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UR - http://www.scopus.com/inward/citedby.url?scp=84928348121&partnerID=8YFLogxK
M3 - Article
AN - SCOPUS:84928348121
VL - 18
SP - 143
EP - 158
JO - Romanian Journal of Economic Forecasting
JF - Romanian Journal of Economic Forecasting
SN - 1582-6163
IS - 1
ER -