Lecture

Real Estate Economics: Margins and Pricing

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Description

This lecture covers the concept of the promoter's margin in real estate development, detailing the steps from land acquisition to building sale. It explains how the margin influences land pricing and construction costs, and discusses typical margin rates in Switzerland. Various interpretations of maximum land price, minimum building price, and maximum construction cost are presented, highlighting the promoter's decision-making process. The lecture concludes by emphasizing the need for promoters to optimize land, construction, and building prices to maximize profits.

In MOOC

Soil and Real Estate Economics II

An economics course that presupposes no formal economic knowledge other than that developed in the first modules of the first part of this course, Land and Property Economics I. In this second course (Economics of Land and Real Estate II), we will cover..: The developer's countdown and its influence on land prices The calculations of property developers in general Market supply and demand and how they determine and vary prices Differentiating land by urban location

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Related concepts (23)

Real estate

Real estate is property consisting of land and the buildings on it, along with its natural resources such as growing crops (eg. timber), minerals or water, and wild animals; immovable property of this nature; an interest vested in this (also) an item of real property, (more generally) buildings or housing in general. In terms of law, real is in relation to land property and is different from personal property while estate means the "interest" a person has in that land property.

Real estate development

Real estate development, or property development, is a business process, encompassing activities that range from the renovation and re-lease of existing buildings to the purchase of raw land and the sale of developed land or parcels to others. Real estate developers are the people and companies who coordinate all of these activities, converting ideas from paper to real property. Real estate development is different from construction or housebuilding, although many developers also manage the construction process or engage in housebuilding.

Real-estate bubble

A real-estate bubble or property bubble (or housing bubble for residential markets) is a type of economic bubble that occurs periodically in local or global real estate markets, and it typically follows a land boom. A land boom is a rapid increase in the market price of real property such as housing until they reach unsustainable levels and then declines. This period, during the run-up to the crash, is also known as froth.

Construction management

Construction management (CM) is a professional service that uses specialized, project management techniques and software to oversee the planning, design, construction and closeout of a project. The purpose of construction management is to control the quality of a project's scope, time / delivery and cost—sometimes referred to as a project management triangle or "triple constraints." CM is compatible with all project delivery systems, including design-bid-build, design-build, CM At-Risk and Public Private Partnerships.

Construction

Construction is a general term meaning the art and science to form objects, systems, or organizations, and comes from Latin constructio (from com- "together" and struere "to pile up") and Old French construction. To construct is the verb: the act of building, and the noun is construction: how something is built, the nature of its structure. In its most widely used context, construction covers the processes involved in delivering buildings, infrastructure, industrial facilities, and associated activities through to the end of their life.

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