Optimizing the regulation of commercial real estate presale deposits: The role of third-party regulation and the design of government incentives

In recent years, the outbreak of mass loan suspension by homebuyers in China has triggered widespread concern about the regulation of presale deposits for commercial real estate. To optimize the supervision mechanism of presale deposits, the regulatory role of third-party institutions is being considered by local governments. However, the efficacy of third-party regulatory mechanisms is not guaranteed, and rent-seeking behaviors driven by substantial profits may lead to mechanism failures. By constructing evolutionary game models and analyzing system equilibriums under both administrative and third-party regulatory modes, this study investigates the effectiveness of introducing third-party institutions into the regulation of presale deposits for commercial real estate, proposes suggestions to mitigate developer speculative behavior and addresses the design challenges of local government optimal incentive contracts. Findings indicate that under the administrative regulatory mode, overly strict government regulation may inadvertently enhance the covert nature of developer speculation. The introduction of third parties effectively substitutes for government regulation and better suppresses developer speculative motives. In the setting of incentive mechanisms, the intensities of rewards and penalties need to satisfy different optimal solution relationships based on varying initial conditions. When establishing performance evaluation standards, governments should consider the magnitude of reward and penalty intensities to enhance the quality of third-party regulation. Specifically, when reward intensity exceeds penalty intensity, lowering performance evaluation standards is more conducive to achieving the ideal equilibrium of the system. Conversely, raising performance evaluation standards yields superior results. This study provides a comprehensive theoretical analysis and practical recommendations for the regulation of presale deposits in commercial real estate.