The Application Of Real Options Method In The Presale Of The Real Estate

As selling residential units before they are completed (hereafter known as presale) is a common practice in China where real estate market is volatile, it would be essential to study when the presale residential units will enter the market and how to make out the presale launch strategies for the residential units. Despite this, to the best of the author's knowledge, there is no complete theoretical model to study the problem of the presale residential units of our country. Most of the academic study which introduce the real option in domestic and foreign is about the development of the land, the repetition development of the real estate, the lease of the real estate, the excessive development of the land, the development opportunity of the land, the development density of the land and the transforms of the land's use and so on. Especially, there is no complete theoretical model to study the opportunity when the presale residential units enter the market as the price of real estate market experience a sudden significant jump, and how to make out the best presale launch strategies for the residential units of the real estate of China which take"the first payment plus mortgage"as characteristic. Therefore, this dissertation first study the opportunity when the presale residential units enter the market as the price of real estate market follow the Wiener process and experience a sudden significant jump. And then make out the optimal presale launch strategies for the residential units.This thesis consists of six chapters. Firstly is the introduction, which includes the background of the problem, the research statement of overseas and inner land, the train of thought, the innovation of the thesis. Secondly, this paper introduces the concept and originates of the commodity apartment, and then introduces the presale system of the commodity apartment in Hong Kong and other developed country such as American, Japan, German and so on. This paper also introduces the presale system of our country and compares with the county as referred to above. Thirdly, this paper elaborates the theory of the real option and compound option, and solves the two problems as described above. Finally, the conclusion is drawn, the problems are given and the limitations are postulated.The follow are the main conclusions in this dissertation: sets up the model for the developer when the price of real estate market follow the Wiener process and experience a sudden significant jump and the model which can helps the developers to make out the optimal presale launch strategies for the residential units, and infers the corresponding conclusions. After studying and analyzing the presale situation of the real estate deeply in our country, we find that the two models solve problems for the developers when they make decisions for the presale of the residential units, so the study in this paper is valuable and practical.