Development of the Housing Business Model to Minimize the Fluctuation Risk of the Housing Market

Abstract

This paper proposes a housing business model, where the presale and Chonsei housing are supplied under a presale system at the same time based on the characteristic correlation between the housing presale market and Chonsei market in Korea. Markowitz portfolio theory was used to review the risk diversification effects from the changes in the ratio between the presale housing supply and the Chonsei housing supply. The housing sale price indicator was used as a proxy variable to determine the presale housing supply. The housing Chonsei price indicator was used as a proxy variable to determine the Chonsei housing supply. The proposed housing business model was applied to major areas in Korea to examine the risk diversification effect. Comparisons of the regional portfolio analyses showed that the flexibility of the proposed housing business model can be quite effective because each regional housing market exhibits different characteristics. Market participants, such as developers, construction companies, consumers, and government, can expect various effects through the proposed housing business model. Nevertheless, policy support is necessary for practical applications of the proposed housing business model. In particular, public funds from the government need to be introduced.

Development of an income and cost simulation model for studio apartment using probabilistic estimation

“…A major cause of business failure is their not being able to redeem the financial expenses (Warszawski 2003). Most of the recent realestate development business failures can be found in financial cost forecast failure (Lee, Lee, and Kim 2016;Warszawski 2003). Therefore, we constructed the simulation model by linking the financial cost generated during the project promotion with the import model.…”

A Dynamic Simulation Model for Economic Feasibility of Apartment Development Projects

“…Most apartment development project failures are attributed to inadequately forecasting the sale period (Lee, Lee, & Kim, 2016), because extended sale periods lead to enormous expenses (Woo & Lee, 2005). Therefore, the model developed in this study is designed to project financial costs and income that occur as the project goes on, by setting the number of months from project commencement to completion as a parameter.…”