INNOVATIVE SOCIAL SALES PROGRAMMES: A COMPARATIVE RISK ANALYSIS

Bert Kramer

ERES from European Real Estate Society (ERES)

Abstract: In recent years, Dutch housing corporations have introduced a number of innovative types of sale. These innovative types of sale have in common that a house is sold to the tenant at a discount. In this way, buying a house becomes affordable for lower-income households. And the housing corporation obtains cash, which can be used for (social) housing investment. The different innovative types of sales differ in the conditions under which the house is sold. These conditions range from sharing the profit (or loss) at turnover, repaying the (indexed) discount at turnover or only buying the dwelling and leasing the land. Therefore, even if the discount is the same, the risk ñ return profile of the different types of social sale can differ. In this paper, we analyse and compare the risk ñ return characteristics of three different innovative types of sale. We use Monte Carlo simulation to establish the expected cash flows and Net Present Values, and t he uncertainties herein measured as Value at Risk.

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2008-01-01
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