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Spatial investments in the real estate industry: Based on the population flow within the city

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  • Yang, Xiaozhong
  • Zhang, Cheng

Abstract

In spatial decision-making, real estate developers should research the residential stratifications of people at different income levels. With some public services tied strictly to homeownership, and minimum size requirement for house purchasers, both completed stratification and mixed stratification exist in the model. In both patterns, developers should invest more in suburbs when the supply of urban land decreases (or the suburban land supply increases), or when the commuting cost of suburban residents decreases (or urban public services deteriorate). The quantity of property buyers with rigid demand under the mixed stratification is more than that under the completed stratification. Ignoring them, therefore, would lead to an underestimation of suburban profits when the commuting cost is reduced (or when the urban land supply decreases), and an overestimation of urban profits when the urban public services improve (or when the suburban land supply decreases), misleading the investment of developers as result.

Suggested Citation

  • Yang, Xiaozhong & Zhang, Cheng, 2022. "Spatial investments in the real estate industry: Based on the population flow within the city," Journal of Business Research, Elsevier, vol. 140(C), pages 593-603.
    • Handle: RePEc:eee:jbrese:v:140:y:2022:i:c:p:593-603
    DOI: 10.1016/j.jbusres.2021.11.026
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