AI1144 Fundamentals of Residential Real Estate Finance 7.5 credits

Fastighetsfinansiering och investering

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Offering and execution

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Course information

Content and learning outcomes

Course contents *

Real estate investments, the financial system, financial intermediaries, credit market instruments, short- and long-term interest rates, financial leverage, present value mathematics, mortgage markets, loans with fixed and variable rates, loan amortization schedules, interest rate margins, yield curves, financial analysis of debt-financed property investments, banking, capitalization rates, credit risk, interest rate risks, financial stability and financial regulations, financial crisis.

Intended learning outcomes *

After passing the course, the student should be able to:

  • describe the function, structure, instruments and actors of financial and real estate markets 

  • describe and analyze how different financing alternatives affect real estate investments’ cash flows and profitability,

  • explain and analyze how various factors can determine the development of interest rates, and how changes in interest rates might affect the valuation of credit market instruments and properties,
  • interpret and analyze some key financial ratios presented in banks’ and real estate companies’ financial reports,
  • describe and analyze various measures to increase financial stability and counteract financial imbalances,

  • explain how knowledge in real estate finance and investment analysis can be used to analyze and develop activities that can lead to sustainable economic, environmental and social development.

Course Disposition

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Literature and preparations

Specific prerequisites *

AI1128 Economics of the Built Environment or equivalent

AI1178 Applied Mathematics and Statistics for Economists    

Recommended prerequisites

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Equipment

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Literature

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Examination and completion

Grading scale *

A, B, C, D, E, FX, F

Examination *

  • INL1 - Assignment, 3.5 credits, Grading scale: P, F
  • TEN1 - Examination, 4.0 credits, Grading scale: A, B, C, D, E, FX, F

Based on recommendation from KTH’s coordinator for disabilities, the examiner will decide how to adapt an examination for students with documented disability.

The examiner may apply another examination format when re-examining individual students.

Other requirements for final grade *

Coursework 3,5 credits (INL1)

Written exam 4 credits (TEN1)

Opportunity to complete the requirements via supplementary examination

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Opportunity to raise an approved grade via renewed examination

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Examiner

Fredrik Armerin

Further information

Course web

Further information about the course can be found on the Course web at the link below. Information on the Course web will later be moved to this site.

Course web AI1144

Offered by

ABE/Building and Real Estate Economics

Main field of study *

Built Environment, Technology

Education cycle *

First cycle

Add-on studies

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Contact

Fredrik Armerin (fredrik.armerin@abe.kth.se)

Ethical approach *

  • All members of a group are responsible for the group's work.
  • In any assessment, every student shall honestly disclose any help received and sources used.
  • In an oral assessment, every student shall be able to present and answer questions about the entire assignment and solution.