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UBC Theses and Dissertations

Essays on real estate finance and economics : strategies for developments under uncertainty You, Seung Dong


This thesis contains three essays on real estate finance and economics. Both chapter 2 and chapter 3 study a real estate developer's timing strategies under uncertainty and chapter 4 studies the ratio of housing price-to-income. Chapter 2 analyzes the effects of leverage on the timing of developments because most real estate developers depend heavily on leverage. In particular, it investigates the leverage effects on real estate developments that involve conversion of land from agricultural to urban use. Leverage matters for a developer who wants to optimize the timing of developments. Chapter 3 studies the effects of heterogeneity of real assets on the timing of developments because each property is unique and its value is likely to move together with values of neighboring properties. Heterogeneity matters for a developer who builds multiple properties in a project. Chapter 4 analyzes the price-to-income ratio which has been used widely as a measure for housing bubble. A cross-city comparison of price-to-income ratios can overestimate bubble in cities of high amenities.

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