RE2REEI-Real Estate Economics and Investment

Module Provider: Real Estate and Planning
Number of credits: 20 [10 ECTS credits]
Level:5
Terms in which taught: Autumn / Spring term module
Pre-requisites: IC103 Introductory Economics for Business and Finance
Non-modular pre-requisites:
Co-requisites:
Modules excluded:
Module version for: 2017/8

Module Convenor: Prof Michael Ball

Email: m.ball@henley.reading.ac.uk

Summary module description:
This module is delivered at University of Reading and University of Reading Malaysia.

Aims:
The module aims to provide an insight into the application of economic and financial principles and models to property and land use, building on relevant material from Part 1, and to provide a solid basis for more specialised analytical work in Part 3.

Assessable learning outcomes:

The module emphasises knowledge and understanding of the economic and investment principles underlying property markets. Upon completion of the module, students should be able to:



• Discuss and explain the main economic concepts and models relating to the economics of cities, property and land;



• Discuss and explain the economic principles underlying investment decision making;



• Identify different concepts of market efficiency and principles of portfolio allocation and indicate their applicability in real estate markets;



• Analyse the occupation, use of and investment in real estate assets using economic models;



• Discuss and explain the principal determinants of the demand for, the supply of, and the location of commercial, industrial and residential property;



• Identify the different adjustment mechanisms in each property sector.


Additional outcomes:
The module will assist students in developing an overall awareness of economic conditions, spatial economic growth and macro-economic policy and their significance on business decisions and outcomes. The module will enhance students’ quantitative and analytical skills.

Outline content:

The module consists of four main thematic areas:




  • Urban Economic Theory

  • Economics of Real Property Markets

  • Housing Economics

  • Real Estate Investment



The first theme develops a full equilibrium urban economic model trough the following topics:




  • Economic equilibrium in land markets

  • Land use patterns

  • The role played by transport costs, external economies, labour market dynamics, heterogeneity in incomes, amenities



The second theme develops a more specific analysis of commercial real estate markets discussing:




  • Demand for real estate  

  • Supply of real estate

  • Rental and capital value adjustment processes



The third theme develops principles of financial economics and discusses their applications to real estate investment:




  • Mathematical tools for portfolio allocation, computation of risk and returns in asset markets

  • The theory of market efficiency and the implications for investment decisions

  • Real estate cycles



The fourth theme develops an analysis of the housing market discussing:




  • Factors affecting the demand and supply of residential space

  • Housing economic models

  • Further topics like segregation, public goods and macroeconomic dynamics.


Brief description of teaching and learning methods:
The module will be primarily lecture based with directed supplementary reading and the use of Blackboard. For each area, on-line materials will be posted to aid students in developing their understanding of the linkages between the lecture topics. The directed reading will consist both of academic material on the theoretical concepts/models relating to the lectures and material relating to contemporary market, economic and political conditions. Students are expected to work regularly on exercise sets and questions on directed readings and answers will be discussed during the lectures.

Contact hours:
  Autumn Spring Summer
Lectures 20 20 2
Tutorials 0
Guided independent study 66 66 26
       
Total hours by term 86.00 86.00 28.00
       
Total hours for module 200.00

Summative Assessment Methods:
Method Percentage
Written exam 100

Other information on summative assessment:

Formative assessment methods:

Penalties for late submission:
The Module Convenor will apply the following penalties for work submitted late, in accordance with the University policy.

  • where the piece of work is submitted up to one calendar week after the original deadline (or any formally agreed extension to the deadline): 10% of the total marks available for the piece of work will be deducted from the mark for each working day (or part thereof) following the deadline up to a total of five working days;
  • where the piece of work is submitted more than five working days after the original deadline (or any formally agreed extension to the deadline): a mark of zero will be recorded.

  • The University policy statement on penalties for late submission can be found at: http://www.reading.ac.uk/web/FILES/qualitysupport/penaltiesforlatesubmission.pdf
    You are strongly advised to ensure that coursework is submitted by the relevant deadline. You should note that it is advisable to submit work in an unfinished state rather than to fail to submit any work.

    Length of examination:
    One three-hour examination.

    Requirements for a pass:
    A mark of at least 40%.

    Reassessment arrangements:
    One three-hour examination.

    Additional Costs (specified where applicable):

    Last updated: 31 March 2017

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