Some due diligence regarding future real-estate prices

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Reference no: EM131500884

I am working on "the buy versus rent decision case" time value of money (IVEY PUBLISHING) "rebecca young"

1. Determine the “net” future gain or loss after two, five and 10 years under the following scenarios, which Rebecca Young has determined are possible after some “due diligence” regarding future real-estate prices in the Toronto condo market:

a. The condo price remains unchanged.

b. The condo price drops 10 percent over the next two years, then increases back to its purchase price by the end of five years, then increases by a total of 10 per

cent from the original purchase price by the end of 10 years.

c. The condo price increases annually by the annual rate of inflation of 2 per cent per year over the next 10 years.

d. The condo price increases annually by an annual rate of 5 per cent per year over the next 10 years.

2. As Rebecca Young, what decision would you make? Describe any qualitative considerations that at could factor into your decision.

Reference no: EM131500884

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