Municipal property pricing model: A sustainable viewpoint for urban and rural areas

Abstract

This study aims to create a sustainable land pricing model based on Black-Scholes theory, integrating critical environmental and socio-economic factors to promote equitable development in both urban and rural areas. By conducting a comprehensive literature review spanning macroeconomics, environmental impact, and sustainable land management, a robust mathematical framework is developed using principles of financial engineering. The proposed model not only predicts housing prices with high accuracy (93.6% to 95%) but also delineates optimistic and pessimistic valuation boundaries while identifying regions with high developmental potential through trend indicators. Urban area price growth is forecasted between 2.1% and 21.5%, providing actionable insights for future-oriented planning. Beyond financial forecasting, this model incorporates sustainability metrics, such as land-use efficiency, ecological footprint, and green infrastructure potential, making it a strategic tool for climate-resilient urban planning. It supports real estate developers in evaluating environmentally responsible investment opportunities, while offering investors and policy-makers a decision-making instrument aligned with low-carbon and socially inclusive growth. The findings provide a foundation for region-specific, sustainability-oriented pricing strategies, fostering long-term economic viability, environmental stewardship, and informed governance in the real estate sector.