Real Estate Finance
Dr. K. S. Tse, University of Hong Kong, Spring 2002
E-mail: ktse@econ.hku.hk
Course Objectives:
Real Estate represents a large fraction of the world's wealth, and its efficient utilization and the
markets in which it is traded involve many interesting and complex economic and policy issues. The
objective of this course is to develop an analytical framework by which students can make sound real
estate investment decisions. The main emphases of the course are on theory, concept building,
financial modelling, and practical application. In particular, class discussions will cover the
following areas in real estate:
•
•
•
•
Real estate markets and investments, appraisals, and development
Institutional aspects of real estate finance
Optimal financing strategies
Pricing of Mortgage-Backed Securities
Materials and data pertaining to local real estate market will be used throughout the course whenever
possible.
Text and Reading Materials:
There is no required text book for this course. Reading materials for all topics will be handed out in
class as well as put on reserve at the HKU library. Students are responsible for all materials.
•
References:
Real Estate Finance and Investments, Bruggeman and Fisher, 9th Edition, Irwin.
Required Tool:
A standard financial calculator such as TI BA35 and HP 12C.
Grading Policy:
The course grade will be based on tutorial discussions on local real estate market, an in-class and a
take-home mid-term test, and the year-end exam. The point distribution is as follows:
Cases Analysis (Tutorial)
Two Tests (1 in Class and 1 take home)
Year-End Final Exam
20%
20%
60%
Problems sets will be assigned, but they will not be collected and therefore not graded. The purpose
of the assignments is to assist you in reviewing the materials and preparing for the exams. Details
about the requirements for the case reports will be given shortly after the semester starts.
Date
Jan 22
Jan 24
Jan 29
Jan 31
Feb 05
Feb 07
Feb 12
Feb 14
Feb 19
Feb 21
Feb 26
Feb 28
Mar 05
Mar 07
Mar 12
Mar 14
Mar 19
Mar 21
Mar 26
Mar 28
Apr 02
Apr 04
Apr 09
Apr 11
Apr 16
Apr 18
Apr 23
Apr 25
Apr 30
May 02
Reading
Assignments
Topic
Tue
Thur
Tue
Thur
Tue
Thur
Tue
Thur
Tue
Thur
Tue
Thur
Tue
Thur
Tue
Thur
Tue
Thur
Tue
Thur
Tue
Thur
Tue
Thur
Tue
Thur
Tue
Thur
Tue
Thur
Introduction
Residential Property Market in Hong Kong
Financing Residential Properties
Financing Residential Properties
Financing Residential Properties
Mortgage-Related Backed Securities
Lecture notes
Lecture notes
Lecture notes
University Holiday
University Holiday
Mortgage-Related Backed Securities
Mortgage-Related Backed Securities
Mortgage-Related Backed Securities
Mortgage Market
Real Estate Auctions in Hong Kong
Real Estate Auctions in Hong Kong
Lecture notes
Reading Week
Reading Week
Real Estate Auctions in Hong Kong
Quiz
Pre-Sale Transactions
Pre-Sale Transactions
Default Risk in Real Estate Transaction
Default Risk in Real Estate Transaction
Valuation of Income Properties
Valuation of Income Properties
Valuation of Income Properties
Land Valuation
Land Valuation
Land Valuation
Valuation of Redevelopment of Income Properties
Valuation of Redevelopment of Income Properties
Lecture notes
Lecture notes
Lecture notes
Lecture notes
RM1, RM2
Lecture notes
Reading Materials
RM1:
Jeffrey Fisher, George Lentz, and K.S. Tse, “Valuation of the Effects of Asbestos on
Commercial Real Estate.”
RM2:
George Lentz and K.S. Tse, “An Option Pricing Approach to the Valuation of Real
Estate.”
Tse 2