How a capital provider affect the housing market entrance decision

Abstract

This thesis mainly discusses that when a capital provider participates in the existing two-period simple game between a house buyer and a construction developer the effects of the housing market entrance decisions According to previous research the housing presale market has two kinds of options One is a give-up option of a buyer The other is developer’s construction abandonment option According to our model without heterogeneous expectation and the difference between individual specific default risks the lending rate offered by the capital provider has no direct effect on the decision of the market choosing Moreover the numerical examples also show that when the house buyer’s give-up option value is zero there is no inducement for the capital provider to enter the housing presale market Therefore the presale market entrance level increases If the value of the construction developer’ abandonment option is zero the capital provider will offer the construction loan to a developer in the presale market Hence lower entrance level of the presale market occurs

Date of Award	2014 Jul 16
Original language	English
Supervisor	Yu-Hong Liu (Supervisor)