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on Urban and Real Estate Economics |
| By: | Décamps, Aurélien; Gaschet, Frederic; Pouyanna, Guillaume; Virol, Stephane |
| Abstract: | This article analyses the formation of urban and suburban employment centralities and their impact on local housing values. Urban sprawl combined with the formation of suburban employment poles have produced more complex spatial patterns characterized by a polycentric city. This paper assumes that these changes in urban forms have influenced residential dynamics and have thus influenced housing prices. The presence of suburban centralities is expected to improve local attractiveness and thus to be capitalized in housing prices. The aim of the article is to disentangle the specific impact of the various factors explaining housing prices differentials. We are specifically interested in the influence of economic centralities among other factors such as accessibility or the presence of diverse amenities. We use semi-parametric hedonic regression modelling which allows us to estimate sharply the impact of urban subcenters on housing prices among other factors, by considering varying distance thresholds and heterogeneous spatial patterns of housing prices. The dataset come from residential transactions recorded by notary offices. The precise geographical coordinates of each transaction is used in addition with economic value and intrinsic characteristics of the buildings, allowing a sharp estimation of the spatial pattern of housing prices. Explanatory variables come from several data sources recorded at a fine spatial scale and concern mainly accessibility, socio-economic attributes, local amenities and employment density. The impact of economic centralities on housing prices is studied in three major French cities: Paris, Lyon and Bordeaux. This allows a comparison of three different urban patterns. The contribution of the paper is to investigate the impact of urban structure on housing prices and to overcome several limitations of hedonic models using semi-parametric regressions. This paper relies on the interactions between urban economics and real estate economics. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_224&r=ure |
| By: | Chin, Lawrence; Husaini, Nur Khairun |
| Abstract: | Housing is a commodity of variable uses, equipped with unique characteristics attributable to internal and external factors, each playing a major role in determining its inherent value. Location theories were developed by early economists to explain the pattern of land use by providing solutions to the problems associated with the optimal use of the land. Improvements in accessibility are expected to generate positive effects on house prices since commuting would be enhanced. Additionally, transportation networks would attract different types of activities for the work, live and play lifestyles for the residents.The objective of the study is to examine the effects of an Integrated Transport Hub (ITH) as an urban planning policy on the prices of public residential estates in Singapore. A controlled empirical study is conducted using the Bukit Panjang Transport Hub to examine the differences in resale prices between units located in the influence and the control areas. Hedonic regression methodology is applied to analyse the impact of the transport mode on the neighbouring residential properties. The hypothesis was formed on the premise that ITHs would generate a housing premium on units located in the influence areas, using walking distance to distinguish between units located near to or away from the transport hub. The findings from the multiple linear regression support the hypothesis when a premium of 12.6% was recorded for units within the influence area.The significance of the study is useful to assist in planning of public transport and its likely influence on prices in the housing market. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_42&r=ure |
| By: | Chiang, Ying Hui |
| Abstract: | Many previous studies have shown that the Mass Rapid Transportation system has a positive impact on property prices due to its availability. But this impact reduces as distance from the station increases. The pattern of the change between different stations in different locations has not been fully discussed. Additionally, most of the studies usually ignored spatial interdependence among regions. Coupled with the advancement in geographical information system and the proliferation of spatial data, Real estate researchers have demanded advanced spatial analysis tools.This paper collects the data from 11,509 house transactions during 2007to 2008, which are near the Taipei Mass Rapid Transportation system within the radius of 1 km, to examine the impact of Mass Rapid Transportation system on metropolitan housing prices in different locations. We classify locations of the samples into CBD, CBD fringe, and suburbs in the metropolitan area. And then the types of stations are divide into two types, single-line station and multi-line station.This research uses spatial econometrics to estimate a residential housing model that includes cross-region interdependence. The empirical results find the price effect of distance from the MRT station is nonlinear. This effect tends to be stronger at certain distance intervals. The effect of MRT stations between urban and suburban areas is pronounced. The effect tends to get stronger in certain area, the closer the property lies within to the suburbs area the greater the effect is. Also, we find price gaps between different metro station types. Multi-line stations have greater positive effect on residential price. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_297&r=ure |
| By: | Burhan, Burhaida; Hokao, Kazunori |
| Abstract: | Housing units are known as multidimensional goods, yet the approach of identifying this multiple characters of properties are seldom clarified. This study allocates a perspective of identifying the many dimensions of housing unit from spatial point of view. The concept of proximity or nearness in particular is essential in many forms of human reasoning. Distance is then one of the factors that determine proximity, but not the measure of proximity itself. While the proximity measure is mostly a conceptual formation, it is often inversely proportional to a distance measure. This study identifies appropriate measures of distance using Nearest Neighbourhood Analysis (NNA) to generate spatial attributes. Kernel Density Estimators (KDE) is later used to illustrate patterns of spatial clusters for housing units’ distances patterns. The analyses show distance matrices as appropriate benefactor to derive appropriate spatial attributes, while the diversity of Kernel Density patterns shows different spatial perspectives of housing units. The implications of monocentric and polycentric patterns determine contributions of distance matrices in multidimensional aspect of a housing unit. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_167&r=ure |
| By: | Chien, Mei-Se |
| Abstract: | Being different from past research of regional housing prices, this paper employs smooth transition regression model, derived in Teräsvirta (1998), to investigate ripple effects among four regional house prices in Taiwan. The aim of this paper is to test whether a smooth transition regression model, which is capable of capturing this non-linear behaviour, can show a better characterisation of regional housing prices than a linear model. This empirical analysis applies the four regional house prices of Taiwan, including the capital in Taiwan, Taipei City, and its suburban area, New Taipei City, and the other two mega cities of Taichung City and Kaohsiung City, from the first quarter of 1998 to the second quarter of 2011. Using the changing rate of housing price of Taipei City to be the threshold variable, the empirical results of the smooth transition regression model show that the ripple effect exists between housing prices of New Taipei City and Taipei City, while there is no ripple effect between housing prices of New Taipei City, Taichung City and Kaohsiung City. Besides, this paper has presented evidence of a non-linear relationship between housing prices of New Taipei City and Taipei City. When the changing rate of housing price in Taipei City is lower than 15.02, increasing housing price of Taipei City will make the hosing price of New Taipei City rise. Inversely, if it is higher than 15.02, increasing housing price of Taipei City will make the hosing price of New Taipei City decrease. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_51&r=ure |
| By: | Décamps, Aurélien; Gaschet, Frederic; Pouyanne, Guillaume; Virol, Stephane |
| Abstract: | This article aims at identifying emergent secondary centers and measuring their impact on residential and commercial real estate values, through the estimate of hedonic gradients. Urban sprawl combined with the formation of suburban employment centers have produced more complex spatial patterns characterized by polycentric structures. This paper assumes that these changes in urban forms have influenced location choices of both households and firms but have a differentiated impact on two types of urban values: residential and commercial real estate values.We use hedonic regressions to estimate the impact of the polycentric structure of the city on residential and commercial real estate values among other traditional factors. These estimations are completed by semi-parametric regressions in order to analyse sharply the form of the price gradients in a polycentric city. Data on residential and commercial real estate transactions come from PERVAL database recorded by French notary offices. The precise geolocation of transactions used in addition with a rich set of intrinsic characteristics of the buildings allows a sharp estimation of the spatial pattern of real estate prices. It is completed by a rich set of location attributes coming from several data sources recorded at a fine spatial scale and concerning mainly accessibility, socio-economic attributes, local amenities and equipments, distance to the main subcenters. The study is conducted within the Lyon and Bordeaux metropolitan areas in France, allowing a comparison of two different urban patterns and urban sizes. The various scales of the urban polycentrism are explored by taking into account two types of subcenters (by emergence and integration of satellite towns) and by estimating semi-parametric hedonic models. The first contribution of the paper is to analyse sharply two main trends of urban centrality through real estate values: residential centrality and employment centrality. The residential centrality is recomposed by the increasing influence of urban amenities at the expect of employment accessibility. Economic centrality is increasingly differentiated from residential centrality. The second contribution of this paper is to provide a precise estimation of the form of the hedonic gradients for residential and commercial real estate values through the use of semi-parametric regressions. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_175&r=ure |
| By: | Herath, Shanaka; Choumert, Johanna; Maier, Gunther |
| Abstract: | The continuous expansion of urban areas at the expense of rural and natural areas should understandably increase the desire for green amenities among urban populations. In this context, greenbelts become an important component in the modern city landscape. We apply the hedonic price method in order to determine whether the implicit value of greenbelts is capitalized into real estate prices in the city of Vienna (Austria). We improve the traditional model using spatial econometric techniques and test different spatial models, namely the spatial lag model, the spatial error model and the spatial Durbin model. Evidence suggests strong support for the spatial Durbin model in the context of our data. We find, in particular, that distance to the greenbelt is an important factor that explains residential choices of households: while the CBD exerts a centripetal force, the greenbelt, on the contrary, exerts a centrifugal force. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_337&r=ure |
| By: | Gomes, Sandra Vieira |
| Abstract: | The objective of this paper is to provide an empirical analysis of the influence of traffic noise has on the housing market. Traffic noise can be considered as an environmental externality from road transport system. As so, it affects the value that people are willing to pay for their houses. The value of this effect has already been studied by some authors, with Stated Preference-choice (SP-choice) methods, the hedonic pricing model, or others. The approach used in this study combines traditional methods, namely linear modelling techniques used for quantifying the effect on housing prices fluctuation, with newer methods as the spatial analysis associate d to Geographical Information Systems. There are obvious advantages to a GIS in adding spatial analytical capabilities in terms of increasing its functionality and meeting a demand for systems that do something beyond storing, retrieving and displaying large amounts of information. This study was developed for the city of Lisbon, Portugal. A geographical database was created combining information from the Census, on the housing characteristics, with renting and sales activities. This study applies spatial auto-correlation techniques to analyze the relation between traffic noise and the variation on the housing value in Lisbon, and aims to contribute to the scientific knowledge of housing market in Lisbon, with detailed and accurate information on the factors affecting its variation. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_92&r=ure |
| By: | Crocker H. Liu (Cornell University, School of Hotel Administration); Adam Nowak (West Virginia University, College of Business and Economics); Stuart Rosenthal (Syracuse University, Department of Economics and Center for Policy Research) |
| Abstract: | This paper documents and explains previously unrecognized post-crash dynamics following the collapse of a housing bubble. A simple model predicts that speculative developers ensure stable pre-crash relative prices between small and large homes while their post-crash exit allows small-home relative values to fall. Evidence from Phoenix supports the model. Although home prices doubled 2004-2006, relative prices of small-to-large homes remained nearly constant but then plummeted post-crash. As speculative developers return relative prices must return to pre-boom levels, consistent with patterns since 2011. Anticipated mean reversion indicates that cities can reduce post-crash volatility and mispricing by publicizing size-stratified house price indexes. |
| Keywords: | Housing Bubble, Repeat Sales, Post-Crash Dynamics |
| JEL: | G12 G14 R31 R51 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:wvu:wpaper:14-18&r=ure |
| By: | Gostautas, Ignas |
| Abstract: | This study reveals the evidence of inefficient and divided English and Wales residential real estate market. We examine the relationship between return and risk at a sub-regional level housing markets of the country. The links among the two variables and other housing market and economic factors are investigated with a purpose to explain why the markets do not always follow normal economic practice, according to which, return should be higher in more volatile areas. Additionally, we look for spatial relationships between the markets. We begin with identifying the housing market factors. We proceed by calculating risk ratios, such as standard deviation or market risk (beta) ratio from CAPM model. After that, we continue with spatial diagnostics and multiple and spatial regression models. The results show a very strong spatial autocorrelation among returns of the house price indices in neighbouring areas, while controlling for economic, demographic, liquidity and size factors. However, spatial autocorrelation among risk ratios is of much lower significance or not significant at all. The findings disclose that some local property markets have had returns inadequate to risk, thus proposing adjustments in investment decisions making. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_129&r=ure |
| By: | van den Berg, Pauline; Timmermans, Harry J.P. |
| Abstract: | In urban renewal policies in the Netherlands, great importance is attached to housing diversification and social mix in neighbourhoods. The assumption that housing diversification will lead to more neighbourhood-based social interaction and social cohesion has been taken for granted, although empirical evidence supporting this assumption is scarce and inconclusive. It is therefore important to improve our understanding of the effects of neighbourhood characteristics on neighbourhood-based social contacts, based on empirical results. This paper aims to contribute to this line of research by studying the role of socio-demographics and neighbourhood characteristics in the formation of social network ties and social interactions with neighbours. These relationships are analysed using a multi-level path analysis approach. The analyses are based on data collected in 2011 in 70 different neighbourhoods in Eindhoven, the Netherlands in a survey among 751 respondents. The results indicate that neighbourhood-based contacts are influenced by socio-demographic characteristics. People who spend more time at home (people with children and people who do not work) and who have been living longer at the current address have a larger share of neighbours in their social network and higher contact frequencies with their neighbours. Immigrants have a smaller share of neighbours in their social network. Education is found to have a negative effect, whereas income is found to have a positive effect on social interaction with neighbours. Neighbourhood characteristics are not found to affect social network size, the share of neighbours in the network or the frequency of interaction with neighbours. This finding is at variance with the assumption that an adaptation of neighbourhood characteristics (through urban renewal) can lead to increasing social interaction among neighbours. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_4&r=ure |
| By: | Hartell, Ann |
| Abstract: | Purpose - As mobility is inextricably linked to housing location, the relationship between transport costs and housing costs is a component of neighborhood-level economic condition and resiliency. A number of studies and policy tools have mapped combined transport and housing costs, but these largely rely on affordability thresholds of income-to-housing costs developed in the 19th century (Hulchanski). For example, the Housing + Transportation (H+T) Index displays location costs and defines neighborhoods above the thresholds as 'unaffordable' (CNT). Notably, the H + T Index and similar analyses do little to link these costs to neighborhood outcomes.Methodology - This study seeks to address this gap by using a regression model to evaluate the joint effect of housing costs and vehicle ownership costs on foreclosure rates.Findings and Limitations - The model reveals that both vehicle costs and housing costs are important factors in neighborhood-level foreclosure rates. In interpreting the results of the analysis it must be kept in mind that it is relevant for the neighborhood level not the household level, having some degree of aggregation. Further, high transport costs may be indicative of other spending behaviors that are the actual factors in increased foreclosure rates. Despite these limitations, the finding that transport costs are an important influence on foreclosure rates raises questions about what the true affordability ratio is for housing, and whether high housing prices and nontraditional mortgages can fully explain the dramatic rise in foreclosures.Value - The study has value for regional planners, providing evidence that transport planning and programs are an important component of neighborhood-level economic conditions, thus lending support to integrated programs. The findings can also help refine definitions of affordability so as to better align programs with policy goals. For the transport sector, the model could be used to assess benefits and costs of potential transport investments. For housing developers, the analysis suggests that marketing messages highlighting affordability could be enhanced by including information about transport costs. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_68&r=ure |
| By: | Culley, James; Bailey, Liam; Postila, Mikael |
| Abstract: | The prime housing market is an area of research in which there has been limited attention given in recent academic studies. In this paper we try to identify drivers behind the formation of prime residential property submarkets. We argue that as well as relying on prior knowledge and assumptions of property agents and market participants, the submarkets can and, to an extent, should be derived empirically. As an example we compare our empirically defined submarkets with boundaries defined by experts and analyse differences. We recognise the differing motivations between defining a submarket through prior knowledge versus empirical means and try and evaluate the benefits of combining both methods. London is one of the largest prime residential property markets with a significant amount of foreign ownership, and thus it was chosen as a pilot for our prime submarket research. Drivers for prime residential real estate differ from the ones for the rest of the residential markets. We compile the appropriate dataset for London markets by using Knight Frank’s own transaction data supplemented with information from Land Registry in addition to relevant socio-economic and economic data sources. Spatial and locational effects are accounted for both in the methodology and variables within the models. In this study we utilise a combination of hedonic modelling, principal component analysis and cluster analysis. We will build upon previous studies into defining housing submarkets by assessing the suitability of incorporating local spatial econometric principals into the methodology. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_81&r=ure |
| By: | Mitrakos, Theodoros; Akantziliotou, Calliope; Vlachostergiou, Vassiliki; Tsolacos, Sotiris |
| Abstract: | The recent financial crisis demonstrated once again the importance of the housing market to macro-economic performance and financial stability highlighting the need to understand better the determinants of house prices in different jurisdictions. But similarly the economic swing caused by the financial crisis has had an impact on residential values calling for empirical evidence on the specific factors behind residential price adjustments in this characteristic macroeconomic environment. The objective of this paper is to establish the most important determinants of residential property values in Greece focusing on residential prices in twenty-five major cities in the country. For this purpose, alternative hedonic models have been estimated using a large database of appraisal-based values provided by commercial banks for the period 2006-2013. This particular sample period makes the study of residential prices of greater interest. The determinants of property values across cities are examined in a period of an unprecedented swing in the Greek economy, the result of the sovereign debt crisis, with positive growth rates giving way to a cumulative contraction of the economy of over 20%. Indeed, residential property values in Greece have shown a significant cross section variation.This analysis controls for the impact of macroeconomic conditions across cities and examines the cross city variation in house prices with reference to four categories of influences: (i)socio-economic influences in particular the prefecture’s population density and GDP(ii)location characteristics (eg accessibility) (iii)Infrastructure (eg airport) and amenities(ii) physical characteristics and property specification, primarily age, property type, surface, floor-level, construction quality, storage area, parking space, etc. We find that the location characteristics variables carry significant power for the observed differences in house prices in key cities in Greece. The empirical investigation also offers support to the role of physical characteristics in determining the value of the property. On the other hand amenities like the existence of an airport, university or hospital seem to have a limited effect. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_193&r=ure |
| By: | -Leão-, Souza; de, Fernando pontual; ,; Lima, Edgard Leonardo N. |
| Abstract: | The objective of this paper is to analyze the impact of socioeconomic characteristics of neighborhoods in Recife-PE, Brazil, that determines the preferences of real estate market developers. To achieve the proposal it was used a cluster analysis in the database of ITBI (Tax on Transfer of housing Property), gotten with a Recife City Hall. The socioeconomic characteristics of neighborhoods are included as input variables jointly with the real estate market performance indicators of each neighborhood. The result indicates that the neighborhoods with high level values of socioeconomic indicators present more efficiency to real estate investments of promoters. There is a tendency to a concentration of real estate activities in the reach places of the city, even with other places that have appropriate geomorphologic characteristics and low land prices. The study presents a real estate investment map in the city territory. The real estate market expansion doesn´t occupies these areas. This implies in great urban problems, like difficult traffic mobility and deficient urban services (water supply, sanitation system, and others). |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_3&r=ure |
| By: | Kucharska-Stasiak, Ewa; Zelazowski, Konrad |
| Abstract: | Since the beginning of economic transition responsibility of satisfying housing needs of local communities was transferred to local governments. To fulfill their duties polish municipalities maintain and manage housing stock which includes dwellings for low income households, social dwellings, replacement dwellings and temporary living quarters. In many European countries a process of municipal withdrawing from housing sector can be observed. Local governments consider privatization as an additional source of income and the way of improving the effectiveness of their housing stock management. However this direction in polish conditions not only did fail to stimulate private rental housing but also evoked the sense of social injustice. Modified concept of privatization based on national and local housing strategies need to be developed. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_330&r=ure |
| By: | Escobar D.; Cadena-Gaitán C.; Garcia F. (UNU-MERIT) |
| Abstract: | We apply geo-statistical techniques to find relationships between the geographic location of urban Gas Stations GS and operational features offered by the transport network in Manizales Colombia. This research is built upon primary information collected during a period longer than one year using GPS more than 18 million data points. The methodology consists of i The set-up of the entire urban transport infrastructure network, ii The calculation of the average operating speeds in the links, iii The calculation of the global average accessibility offered by the infrastructure network in different transport modes, iv The calculation of the Spatial Coverage Index, area, population and number of houses covered by the curves of travel time. Graphical results explain the average times invested in reaching a particular GS, and quantitative comparisons between different types of stations are studied. Thus, we establish which sectors of the city are deficient in coverage of this type of activity. The overall results reveal the possibility of reaching a GS in Manizales in an average travel time between 4 and 22 min. |
| Keywords: | Other Production and Pricing Analysis; Transportation: Demand, Supply, and Congestion; Safety and Accidents; Transportation Noise; |
| JEL: | R32 R41 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2014048&r=ure |
| By: | Theisen, Theis; Emblem, Anne Wenche |
| Abstract: | How do residential property prices respond to new highway connections? We explore the impact of reduced travelling time on house prices in four different cities along the southern coast of Norway. The four towns are located as nodes on a chain, where the town of Kristiansand is located in one end of the chain-of-towns. In 2009, a new highway was opened between Kristiansand and three other towns east of Kristiansand. The three towns are located in increasing distance from Kristiansand. The new road substantially reduced the travelling time between the four towns. We use hedonic price functions estimated on the basis of sales data for dwellings in the period before and after the opening of the new highway and examine the impact of the new road on house prices. The fact that the four towns are located as nodes on a chain along the coast, with sparsely populated rural areas inland and between the towns, makes our case particularly suitable for studying the impact of a new road.We hypothesize that the new road reduced housing prices in Kristiansand, which is the largest of the four towns, and increased housing prices in the other three towns. We find that the house prices in Kristiansand increased only 14 per cent over a four-year period, while the increase was about 25 per cent for the other towns. We examine the robustness of our results by considering alternative explanations for the house price changes. We also examine the robustness of our findings by considering the development of house prices in a different town located west of Kristiansand and not directly affected of the new highway. We conclude that a the new and improved highway lead to a substantially stronger price increase in the smaller towns benefitting from better road connection to the larger town Kristiansand. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_48&r=ure |
| By: | Nanda, Anupam; Yeh, Jia-Huey |
| Abstract: | This paper examines the impact of local public expenditure on the built environment. The empirical framework is designed to address the endogenous feedback effects. Various types of expenditures are considered across 29 local areas in Taipei. Using panel data modelling that controls for unobserved heterogeneity, we find some significant effects of infrastructure investment on land values across many areas and, also, some evidence of a social expenditure effect. The local area differences are further explored to examine spillover effects. Spillover effect is not significant when rest of the region is taken into account. However, considerable spillover effects emerge when we focus on neighbouring areas. Also, results show interesting distinctions among various types of public expenditure. Overall, the results are reasonably robust across several model specifications and samples. The results do indicate that public expenditure have some impact and show interesting spatial patterns. These findings highlight important implications for local government policy, spatial planning and the role of public expenditure in local area economic development. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_132&r=ure |
| By: | Pei Kuang |
| Abstract: | The paper presents a model of housing and credit cycles featuring distorted beliefs and comovement and mutual reinforcement between house price expectations and price developments via credit expansion/contraction. Positive (negative) development in house price fuels optimism (pessimism) and credit expansion (contraction), which in turn boost (dampen) housing demand and house prices and reinforce agents' optimism (pessimism). Bayesian learning about house prices can endogenously generate self-reinforcing booms and busts in house prices and significantly strenthen the role of collateral constraints in aggregate fluctuations. The model can quantitatively account for the 2001-2008 U.S. boom-bust cycle in house prices and associated household debt and consumption dynamics. It also demonstrates that allowing for imperfect knowledge knowledge of agents, a higher leveraged economy is more prone to self-reinforcing fluctuations. |
| Keywords: | Boom Bust, Collateral Constraints, Learning, Leverage Housing |
| JEL: | D83 D84 E32 E44 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:bir:birmec:14-07&r=ure |
| By: | Kavarnou, Dimitra; Nanda, Anupam |
| Abstract: | This paper examines the impact of local public amenities on house prices in the islands of Greece. By taking the Greek islands as the case study, which has not been studied in detail on this topic, we analyse how the presence of a public hospital, an airport, a higher educational institution along with other public amenities affect the housing market (primary and second houses). The housing market attributes of the Greek islands that greatly characterise the market affect the housing needs and consumption behaviour, determinants of the demand and supply, the significance of hospital care for the residents, and the need for fast transportation. With the use of hedonic modelling approach and a large dataset of residential properties in the islands of Greece, we try to ascertain the effects of these amenities on the house prices. The model also controls for several structural and locational characteristics of the properties as well as economic and demographic attributes of the islands. The econometric estimation attempts to address common sources of bias with such modelling framework i.e. unobserved heterogeneity, omitted variable bias, non-linear effects. Models are also tested for robustness across several specifications and samples. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_126&r=ure |
| By: | Kavarnou, Dimitra; Nanda, Anupam; Tsolacos, Sotiris |
| Abstract: | This paper examines the impact of local public amenities on house prices in the islands of Greece. By taking the Greek islands as the case study, which has not been studied in detail on this topic, we analyse how the presence of a public hospital, an airport, a higher educational institution along with other amenities affect the housing market (primary and second houses). The housing market attributes of the Greek islands are analysed e.g. the housing needs and consumption behaviour, determinants of the demand and supply, the significance of hospital care for the residents, and the need for fast transportation. With the use of hedonic modelling approach and a large dataset of residential properties in the islands of Greece, we try to ascertain the effects of these amenities on the house prices. The model also controls for several structural and locational characteristics of the properties as well as economic and demographic attributes of the islands. The econometric estimation attempts to address common sources of bias with such modelling framework i.e. unobserved heterogeneity, omitted variable bias, non-linear effects. Models are also tested for robustness across several specifications and samples. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_182&r=ure |
| By: | Van Duijn, Mark; Rouwendal, Jan; Boersema, Richard |
| Abstract: | Local policy makers seek ways to deal with their abandoned industrial heritage. The investments made in these industrial heritage sites are often very substantial and designed to stimulate urban renewal. In this paper, we study whether the redevelopment of five industrial heritage sites caused external effects on house prices of nearby residential areas in The Netherlands. We use a hedonic approach to do a quasi-experiment by comparing house prices before and after the transformation. The external effect is captured by interacting the year of transformation and different distance rings around each industrial heritage site while controlling for many other important variables. We pay special attention to defining the target and control area. If the investments were made on the interior of the industrial heritage site, we find that there are no external effects on house prices of nearby residential areas. If the investments were made on the exterior of the industrial heritage site, we find positive and significant external effects on house prices. However, the decay of these effects over space are different for each case. These results suggests that the external effects are highly heterogeneous and that there is no ‘one-size-fits-all’ policy for redeveloping industrial heritage to induce positive externalities on nearby residential areas. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_59&r=ure |
| By: | Havermans, D.W.Q.; Leussink, M.I.K.; Smeets, J.J.A.M. |
| Abstract: | The housing costs of households are diverse. During the stages of the lifecycle the living costs of households vary substantially. Especially the costs for home-owners fluctuate considerably during their lifecycle. The house of a lot of older households is completely paid for, their loan to value ratio is zero and their remaining housing costs are low. On the other hand, younger households have high costs for mortgages, a high loan to value – even more than 1 – beside their remaining costs.The paper deals with this variation of housing costs among owner occupiers in several life stages and explores the consequences for the housing market. It focuses on the situation of younger households. As a consequence of the long lasting Dutch crisis the selling price of dwellings has gone down and a lot of these households potentially have a residual debt, because the value of their house is lower than their mortgage.This paper explores the extent of the problem, the consequences for the housing market and the possible solutions. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_166&r=ure |
| By: | Gostautas, Ignas |
| Abstract: | Values of the properties in nearby locations almost never differ drastically. This indicates that the values are dependent on their surroundings. Yet, the impact of the location on the value of a property is not constant and reacts in a unique way to changes under different economic events. To date, few authors have examined and exploited these spatial relationships in property markets.In the current research I focus on the commercial real estate market in the UK from a spatial perspective. I use prices of the commercial real estate and employ spatial econometrics to examine the UK property market and its phenomena, such as the spillover effect, prime and peripheral areas, 'fly-to-safety' areas, agglomerations, clusters that act differently from the whole property market or dominant areas that have influence on other areas. The commercial real estate market problems tackled are of importance for real estate investors. I aim to simplify the ways of examining a range of property market issues, to investigate spatial phenomena and to add value for commercial real estate investments decision making. Moreover, the spatial differences observed between the areas in the UK could be of interest for real estate market participants, for example in risk diversification when creating direct commercial real estate portfolios. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_207&r=ure |
| By: | van Ommeren, Jos N.; Van der Vlist, Arno |
| Abstract: | We introduce a methodology to estimate the households' marginal willingness to pay for housing characteristics in regulated housing markets, where houses and households are matched using queueing time. For the Amsterdam Metropolitan area, the households' marginal willingness to pay for the market value of public housing, so the value when sold in the private market, is estimated. We find that the annual marginal willingness to pay for the market value is close to the annual capitalisation rate applicable to investments in housing. We provide evidence of random, and therefore inefficient, matching between households and public houses with long queueing times. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_262&r=ure |
| By: | McCord, Michael; Davis, Peadar; McCord, John; Haran, Martin |
| Abstract: | This paper investigates the endogenous relationships and characteristics of price data operating between and within the housing sectors comprising the Northern Irish housing market in order to examine the dynamic linkages and causal relationships between six key property types. The paper employs the Johansen cointegration technique, Granger causality testing in conjunction with a Vector Error Correction Model and generalized impulse response and variance decomposition analysis to unearth the extent and resulting magnitude of the relationships across property type. The estimated long-run relationship between house prices appear to have remained cointegrated throughout the sample period, with the exception of the apartment property type. The empirical results show causal relationships between house prices at particular pricing structures, however limited causalities at different ends of the price spectrum – illustrating a clear filtration effect within the NI housing market. Indeed, characterizing the price series patterns enables a dynamic specification of the pricing structure and supports a foundation for a pricing/forecasting model going forward in future research. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_189&r=ure |
| By: | Borgersen, Trond-Arne |
| Abstract: | Housing market analysis is normally rooted in one of two distinct modeling frameworks. Either in one where house prices are residually determined by changes in macroeconomic variables such as interest rates, wages, inflation, unemployment and the cost of construction. This approach ignores interplay between market segments and treats housing markets as homogenous. Alternatively, is the analysis rooted in a framework that highlights the same interaction between segments. The latter approach, acknowledging that the housing market is not one market but rather a number of interlinked market segments, can be referred to as a heterogeneous housing market theory camp. Empirical assessments regarding whether housing markets are in or out of equilibrium are however – often due to weak data availability - often derived from the homogeneous housing market theory camp, analyzing house prices responses following shocks to income, rent or interest rates. This paper is concerned with the implications these two distinct theoretical camps have for the structure of risk and the structure of pricing in housing markets. Stated differently, whether empirical assessments derived from the homogeneous theory camp underestimate – or overestimate – pricing and risk in real housing markets? We present a conventional linear housing market model and consider the structure of pricing and risk as well as how different market structures responds to shocks. First we ignore the interrelation between segments. The results derived from this benchmark give indications on the structure of pricing and the structure of risk that will come about in models where housing markets are treated as homogenous residuals. We compare our benchmark with the two heterogeneous scenarios: First a housing market characterized by equity induced up-trading. Second, we allow home equity withdrawal and intergenerational transfer of housing wealth as elder households assist younger adults to become home-owners. When comparing the structure of pricing and risk that come about in these two heterogeneous housing market scenarios to those derived in our homogeneous benchmark we are able to assess the value added, in terms of increased understanding regarding the structures of pricing and risk in housing markets, by allowing for heterogeneous market frameworks. The model shows how out of equilibrium assessments derived from frameworks that abstract away from the interplay between segments might in part be explained by this abstraction. Second, we see how the former framework significantly underestimates house price risk. A main message from the paper is the urgent need for improving data quality on housing market at the micro level to allow for empirical assessments taking market interplay into account. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_58&r=ure |
| By: | Lee, Kwan Ok; Mori, Masaki |
| Abstract: | The finance literature suggests that the Veblen effect (i.e. luxury consumption behavior) could be translated into consumers' behavior with other goods and assets. This study is the first to examine the role that the Veblen effect plays in housing market dynamics, with a focus on spatial and temporal variation in this role. It uses a unique dataset that matches the consumers' appetite for non-housing luxury goods from Google Insights for Search to the premium that they pay for high-end houses in US Metropolitan Statistical Areas (MSAs) during 2004-2011. The results demonstrate that controlling for other MSA demographic and economic characteristics, the Veblen effect has a significant, positive relationship with a premium paid in the housing market. This suggests that high-end houses may have been purchased for the enjoyment of signaling wealth and status and this housing consumption behavior may have partly driven the large deviation of high-end house prices from the median. Housing consumption tends to be motivated more by the Veblen effect in the areas where people pay a steady, higher premium than in other areas with a more volatile, lower premium. In fact, the higher Veblen effect substantially contributes to maintaining the higher level of the premium in these areas even during the bust period. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_34&r=ure |
| By: | de La Paz, Paloma Taltavull |
| Abstract: | This paper develops an analysis of housing supply elasticity by physical characteristics. Housing supply is demonstrated to be a driver of economic growth through different channels (Case, Quigley and Shiller, 2001) and reacts to market incentives with different intensities in the responses to changes on prices. The strong of such responses depends on a bundle of variables related to local house market features. Most of the studies estimate the elasticity values by region or by time but none of them have calculated such difference regarding the physical characteristics. The literature regarding the supply analysis by physical features is weak due to strong requirements of data: micro-data, detailed at local level and including a large number of characteristics and observations. This paper analyses the housing supply model segmenting the market by physical characteristics. It uses a database of micro-data with almost 40 different usable characteristic by observation, with around 1.5 x106 of houses collected from 1995 to 2012 (first semester). The dataset refers to main Spanish regions and it is representative of the eight more active regions in house-building during that period. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_76&r=ure |
| By: | Ismail, Rahah |
| Abstract: | There are a lot of concern both by public at large and the government on the inflated house price in the housing market, fearing that it could lead to property bubble and raises the issue of affordability. On a closer look at the property transactions data, it was observed that the main increase in the house price is often related to the primary housing market, i.e. new supply in the housing market whereas the sales price of existing supply, or the secondary market, remains stable or increase marginally. What is more baffling is that the two markets are sometimes in the same location, with same accessibility, with units available for sale but the sales price of houses in these market shows a marked difference. It is grounded in theory that price is a function of demand and supply. However, if supply is in abundance in the secondary market, what causes the price differentiation between these two markets. This research attempts to unravel the inflated house price in the primary market. First, the research investigates on market efficiency i.e. the extent of dissemination of sales information of both housing in the primary and secondary market. Second, it explores the level of complexity/ease in purchasing houses in the primary and secondary market. Third, it examines the costs of purchasing houses in the two markets to the purchasers. Fourth, it looks at what the housing in the primary and secondary market has to offer in terms of facilities, amenities, design and technology.This research involves looking at published data in the Annual Property Market report, interview with the Malaysian Association of Estate Agents, Residential Housing Developers Association, Auctioneers as well as survey using questionnaires to purchasers of new housing.At the end of this research, it will give an understanding why purchasers are willing to pay more for houses in the primary market, whilst similar housing in the same locality is available in the secondary housing market. The research will suggest what can be done to reduce the price gap between the primary and secondary market. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_44&r=ure |
| By: | Schier, Michael; Voigtländer, Michael |
| Abstract: | Home ownership rates in Germany have increased substantially in recent years. However, the rate still remains on a very low level and shows significant differences across regions. The reasons for these differences and the last developments are not clear. Generally, the decision between renting and buying a house or a flat depends on multiple individual factors like income or risk awareness. Additionally, heterogeneous developments in the real estate markets, indicated by prices, rents or taxes, cause differences in the profitability and the costs of homeownership and renting. The following study analyzes the tenure choice in 402 administrative districts in Germany between 2008 and 2012 with the help of an indicator measuring the relative profitability of letting and buying. The indicator is calculated by taking into account the average rental price and the different tax treatment of tenure choice, the property prices for different administrative districts in Germany, the interest and maintenance costs (user costs of housing). Since tax benefits of landlords are passed through to tenants when competition is severe, the indicator can be used to measure the relative profitability of renting and buying. By using a panel model, we investigate whether the demand for buying or renting – measured by search profiles in ImmobilienScout 24, the leading internet platform for private real estate transactions in Germany – is shifted by changing profitability of letting and buying. Control variables like vacancy rates, demographics or employment validate the robustness of the model as well as accounting for spatial autocorrelation. Results show, that households react on changing profitability and adjust their tenure choice partially to economic factors. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_82&r=ure |
| By: | Lin, Fang-Ying |
| Abstract: | There are numerous studies on discussing the relationship between land price and property price, but none of them analysing the cross relationships between commercial and residential sectors. This paper conducts an inquiry into the own and cross causality relationships between property prices and land prices between commercial and residential sectors in the UK over the period 1990s to 2010. Granger causality models show that: (1) own causality models: land price growth rate and housing price growth rate are interdependent significantly in the housing market. Nevertheless, the causality analysis results are not significant between commercial (including office and industrial markets) land and property markets; (2) cross causality models: housing price growth rate surprisingly granger cause industrial land price growth rates, but not vice versa. At the same time, housing price growth rate and office land price growth rate are related to each other. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_228&r=ure |
| By: | Elliott, Peter; Han, Hoon |
| Abstract: | This paper examines the impact of high voltage overhead transmission lines (HVOTLs) on the prices of detached houses in Queensland. Perceptual studies and hedonic price modelling undertaken confirm that proximity to HVOTL has an important influence on property value but the bearing of a view and tower structure is more significant. A case study analysis of Eight Mile Plains, Brisbane, indicated mean house prices within a 50 metre buffer zone of HVOTL were 20% lower than the median house price for the suburb but were not significantly different in the 200 metre and over buffer zone. Perceptual studies indicated that the home owner's perceived impacts of HVOTL on property value are on average up to 38% reduction in value at 100 metres whereas property valuers and real estate agent perceptions ranged from 5.4% to 17.2%. Hedonic regression models also suggested that proximity to HVOTL and visual presence is significant as far house price is concerned but has no impact on the capital growth of house prices over time post HVOTL placement. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_95&r=ure |
| By: | Baroni, Michel; Barthélémy, Fabrice; Des Rosiers, Francois |
| Abstract: | According to the INSEE database on second-hand apartment sales, overall apartment prices in Paris have been steadily growing from the first quarter of 1998 until the first half of 2009, when they dropped by an overall 7 percent, before resuming their ascent. Between the beginning of 2010 till the end of 2011, Paris apartment prices experienced a stunning growth of roughly 30% and have stabilized since. But some Paris 'arrondissements' have been doing better than others and are still expected to experience value rises in the near future. In the presence of market heterogeneity, the ability of traditional appraisal methods to capture the true property market value may be questioned and emerges as a major issue for local authorities that collect property tax as well as for mortgage lenders confined to tight lending provisions in a crisis context. Assessing such differences in a reliable way is a step forward towards improving mortgage lending risk management.In this paper, the heterogeneity of the Paris apartment market is addressed through assessing the differences in the hedonic price of housing attributes over the 2000-2006 period for various price, hence income, segments of the housing market. For that purpose, quantile regression is applied to the 20 Paris 'arrondissements' as well as to the 80 neighbourhoods, or 'quartiers' (each 'arrondissement' is composed of 4 'quartiers'), with market segmentation being based on price deciles (deciles 1 to 9). The database includes some 159,000 sales spread over a seven year period (2000 – 2006). Housing descriptors include in particular, a price index, building age, apartment size, number of rooms and bathrooms, unit storey, the presence of a lift and of a garage, the type of street and access to building (boulevard, square, alley, etc.) as well as a series of location dummy variables standing for the 'arrondissements' and 'quartiers'.Findings clearly suggest that hedonic 'relative' prices of most housing attributes significantly differ among deciles, although discrepancies tend to vary greatly in magnitude depending on the attribute. Among other findings, the elasticity coefficient of the size variable, which stands at 1.070 for the first price decile (cheapest units), is down to 1.026 for units belonging to the ninth one (dearest units). The floor where the apartment is located, the number of rooms and the building period are significant attributes as well and their impact differ depending on the unit price. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_79&r=ure |
| By: | Newell, Graeme; Lee, Chyi Lin |
| Abstract: | Social housing is a key component in the Netherlands housing markets. This paper assesses the risk-adjusted performance and diversification benefits of social housing in the Netherlands over 1999-2013. This is assessed for the various social housing sub-sectors in the Netherlands, as well as being benchmarked against the performance of residential property, commercial property, shares and bonds. The strategic and social dimensions for the performance of social housing in the Netherlands is also assessed. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_42&r=ure |
| By: | Koppels, Philip W.; Remy, Hilde |
| Abstract: | There is a sound theoretical base and intuitive expectation that urban office markets are too segmented to be accurately described by unitary market models. Nevertheless, previous studies of office market dynamics tend to concentrate on either national or metropolitan markets and assume a unitary market in equilibrium. In spite of the fact that the value of office property attributes may vary across urban submarkets.Office submarkets can be understood as comprising offices that, although not exactly alike in their combination of characteristics, are considered a reasonable substitute for each other. In general, two types of segmentation can be distinguished; spatial segmentation and structural segmentation. Spatial segmentation refers to geographical delineated submarkets due to dissimilar location features. Structural segmentation relates to market segmentation due to building dissimilarities such as building size, building quality and year of development. The study examines the spatial and structural segmentation of the Amsterdam office market. Amsterdam, the study area of this research, has a dispersed office location pattern. Amsterdam is by far the largest office centre in The Netherlands and has an office stock of approximately 6.7 million square meters. Real estate agents identify several distinct office locations; spatial submarkets. Furthermore, distinct building stock segments, relating to building size and building period, are distinguished. In this paper, the Amsterdam submarket structure is examined in a hedonic framework, over the period 1995 – 2011. Prior defined submarkets, as perceived by real estate agents, are tested on consistency and submarkets are statistically derived. For this purpose a standard city-wide hedonic model is formulated and compared with models that take various submarket delineation schemes in consideration. The derived utility for building and location attributes in each model is compared and provides an indication of the submarket structure of Amsterdam. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_227&r=ure |
| By: | Fregonara, Elena; Semeraro, Patrizia |
| Abstract: | The aim of the paper is to investigate the listing behaviour of sellers and agents. To this end, we measured the impact on the list price of the characteristics posted in sales advertisements - the starting point of the selling process. We considered two different measures: the traditional R2 measure to assess the strength of linear dependence between characteristics and price, and a general R2-like measure to assess the proportional reduction in variation of prices explained by the characteristics. Comparing the results was a first step towards investigating the way sellers and agents incorporate house characteristics into listing prices. We performed the analysis on a database of 4240 houses listed in the city of Turin -Northern Italy- in a time period from 2007 to 2012. Results show that the characteristics posted in advertisements explain almost all the price variation. We found empirical evidence that the linear relationship between house characteristics and price explains almost entirely the strength of their association: sellers and agents incorporate characteristics in prices using a linear model. Moreover, the characteristics most associated with prices are location, number of rooms and quality of the building, although only high levels of quality of the building are incorporated into listing prices. In contrast, we found empirical evidence that the other characteristics posted in advertisements, such as unit condition, type of building 'apartment building, detached house' - have a low association with listing prices. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_62&r=ure |
| By: | Trojanek, Radoslaw |
| Abstract: | The main aim of the paper was to identify price changes in the secondary housing market in the years 2008-2012 in the biggest cities in Poland. This aim determines the scope of the subject, which includes price changes in the secondary housing market, relating both to full and limited ownership rights to private accommodation. This research refers only to dwellings located in multi-family buildings. Such choice was determined by two factors. Firstly, the majority of dwellings are located in multi-family residentials (dwelling blocks – up to 90% in big Polish cities). Secondly, houses are characterized by great differentiation regarding both quantitative and qualitative features, which requires the database to include the appropriate information about each property in order to construct house price indexes. On the other hand, the Polish secondary housing market is greater than the primary market (approximately up to three times) taking into consideration the number of transactions.The paper is divided into four parts. In the first part the idea and meaning of house price indexes are analyzed. Then, the transaction and asking prices are described. In the following part, the hedonic methods are presented. The fourth part of the paper contains the analysis of dwelling price changes in the five biggest cities in Poland (Cracow, Lodz, Poznan, Warsaw, Wroclaw) in the years 2008-2012. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_233&r=ure |
| By: | Vincenzo Atella (Department of Economics and Finance and CEIS Tor Vergata, CHP-PCOR); Federico Belotti (CEIS Tor Vergata); Domenico Depalo (Bank of Italy); Andrea Piano Mortari (CEIS Tor Vergata) |
| Abstract: | Spatial econometric models are now an established tool for measuring spillover effects between geographical entities. Unfortunately, however, when entities share common borders but are subject to different institutional frameworks, unless this is taken into account the conclusions may be misleading. In fact, under these circumstances, where institutional arrangements play a role, we should expect to find spatial effects mainly in entities within the same institutional setting, while the effect across different institutional settings should be small or nil even where the entities share a common border. In this case, factoring in only geographical proximity will produce biased estimates, due to the combination of two distinct effects. To avoid these problems, we derive a methodology that partitions the standard contiguity matrix into within-contiguity and between-contiguity matrices, allowing separate estimation of these spatial correlation coefficients and simple tests for the existence of institutional constraints. We then apply this methodology to Italian Local Health Authority expenditures, using spatial panel techniques. We find a high and significant spatial coefficient only for the within-contiguity effect, confirming the validity of our approach. |
| Keywords: | spatial, health expenditures, institutional setting, panel data |
| JEL: | H72 H51 C31 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_967_14&r=ure |
| By: | Leussink, Marieke; Smeets, Jos J.A.M. |
| Abstract: | The Dutch government stimulates elderly people to live independently as long as possible. For that purpose Dutch housing associations are charged with the duty to accommodate elderly people suitable. They are not only delivering services to their own tenants at higher age, but also trying to attract elderly people with a higher income from the owner occupied sector. However, it turns out not to be easy to tempt elderly home owners to move to the rental sector. One of the reasons is the difference in housing costs.The housing costs of households are not only set by the price of rent or mortgage but also by dwelling-related costs like energy and water. The accumulation of housing costs and costs of energy, the total housing cost, differ not only between the owner occupied sector and the rental sector but they also vary according to the stage of the life cycle of these households.Especially the housing costs of elderly residents are rather divergent. Are the housing costs of elderly tenants often comparable with other households in the rental sector, the cost of elderly home owners are significant lower. Lower than the costs of other households in the owner occupied sector as well as lower than the total housing costs of elderly tenants.The paper is based on an extensive survey on housing costs among elderly households in the region of Eindhoven. It explores the housing costs of two types of elderly households in both sectors: the 'young elderly households' (55-74 years) and 'elderly households' (>75 years) and tries to explain the difference.It also discusses the consequences of the difference in housing costs between these two forms of tenure for the possible shift from the owner occupied sector to the social rental sector. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_139&r=ure |
| By: | Coskun, Yener; Watkins, Craig |
| Abstract: | Notions of housing affordability concept are at the heart of debates about access to home ownership, housing finance and social policies globally. The existing housing affordability literature mostly focuses mainly on developed countries. Housing affordability problem in emerging countries are starting to attract increasing attention. This paper seeks to contribute to this emergent literature by analysing housing affordability in Turkey. The paper explores market trends, the nature of the affordability problem and makes some tentative policy suggestions. The paper develops a theoretically informed model to assess affordability using data from 2005 to 2012 on house price to income ratios, the housing affordability index of Turkey (HAIT), and a variety of social and economic indicators. The Turkish results are contrasted with similar measures for other countries. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_12&r=ure |
| By: | Weberndorfer, Ronald S.; Brunauer, Wolfgang |
| Abstract: | In this paper we model small-scale (micro) location variables using geographic information systems (GIS). These variables include information that is usually not available on a small scale from public sources, for example residential environment, noise, accessibility or elevation. The modeling of micro-location variables is mainly based on grid technology with a resolution accuracy of up to 30 meter covering the whole research area (Austria). We give several examples how to model spatial raster variables using the Python programming language. These variables are then used as explanatory covariates in hedonic house price models. We apply a generalized additive modeling (GAM) framework, where continuous covariate effects are modeled as polynomial splines and unexplained spatial heterogeneity (beyond what can be explained by location covariates) as random effects. We find that additional usage of high resolution micro-location variables improves the model quality signi�cantly. The results are displayed on overview maps for Austria as well as in detail for some selected regions, which allows inspecting the effects of the applied grid technology in more depth. The resulting models are used for automated valuation purposes for residential real estate in a large Austrian bank. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_35&r=ure |
| By: | Milcheva, Stanimira; Zhu, Bing |
| Abstract: | This study investigates whether an increase in cross-border bank lending can lead to spillover effects among housing markets of developed countries using a dynamic spatial panel model. Variations in house prices in one country can spill over house prices in other countries by transmitting counterparty risks through a foreign-bank lending channel. Foreign banks intermediate wholesale bank funding and can affect domestic credit supply and asset prices by transmitting financial conditions across borders. Cross-border bank flows transmit financial risks such as currency, maturity, credit and funding risks which may be associated with a change in either global financial conditions or country-specific factors. While controlling for country-level and global risk factors, we find stronger co-movement among house prices between countries with stronger financial integration. Our findings have implications for international portfolio diversification based merely on geographic factors. While other studies find that economic integration drives cross-country correlations in property returns, we show that the fact that the major global institutional markets are highly linked through the financial markets also can lead to increased inter-linkages with hosing markets and a reduction in the attractiveness of real estate in a mixed-asset context. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_133&r=ure |
| By: | Ingaramo, Luisa; Sabatino, Stefania; Talarico, Antonio |
| Abstract: | The paper discusses the results emerging from a research carried out on a social housing intervention currently in progress in Turin, Northern Italy. The aim of the research relays in defining a model useful to control the building integrated sustainability, especially regarding some designing and operative variables such as plants typology, building technologies or inhabitants income burdens, all affecting housing cost components as well as the operating margin of the building manager.The methodological approach is based on the application of a financial-economic and dynamic tool finalized to simulate cash flows scenarios depending on variations to be applied to different variables such as energetic performances of the building, average rents per type of dwelling, etc.The emerging results evidence that it is effectively possible to balance the housing costs components (rent rates and operating expenses) with the energetic performances of the building, reducing up to 60% the energetic expenses and up to10% the 'housing cost' as a whole. The results highlight the added value acquirable by real estate promoters and developers in testing ex-ante technical, designing and managerial choices by means of flexible scenarios.The value of the analysis lies in showing how to take into account architecture, plants and relative impacts on housing costs, in order to define the best mix of technical and operating inputs, to foresee and adjust the economic and social variables, also in relation to a specific urban location and a peculiar mixitè of inhabitants. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_158&r=ure |
| By: | Karl L. Guntermann (Arizona State W.P. Carey School of Business); Crocker Liu (Cornell University School of Hotel Administration); Adam Nowak (West Virginia University College of Business and Economics) |
| Abstract: | The accurate estimation of real estate indices is important for many purposes. A common method to estimate these indices is to use a repeatâ€sales procedure. Although this does not require property attributes, this method discards a large amount of sales. This paper proposes a method that can be used to incorporate a significant percentage of these discarded observations without requiring additional data collection by the researcher. We apply our method to the metropolitan statistical areas of Phoenix and Seattle and find that standard errors are on average twoâ€thirds the value of standard errors from a repeatâ€sales procedure in Seattle and threeâ€eighths the value in Phoenix. |
| Keywords: | Repeat sales index, spatial errors, hybrid methods, nuisance parameters |
| JEL: | G11 G14 R20 R21 R22 R32 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:wvu:wpaper:14-20&r=ure |
| By: | Kolbre, Ene; Aus, Veronika; Kahre, Kristian |
| Abstract: | Housing market dynamics similarly to economic environment are cyclical, which inevitably leads to highs and lows in housing market prices. The purpose of this study was to find out in which market cycle phase Estonian housing market currently is in; which factors drive Estonian housing market price movements. Analysis in this study is based on housing markets’ demand and supply models, ratio analysis and regression analysis. As Estonian housing market is relevantly young capital market starting from the beginning of 1990s, it is also a reason why only studying historic data in Estonia is not enough to receive anticipated information about the housing market’s determinants. This study also collates other European counties’ housing market cycle phases with Estonian.The results of this study brought out a long line upward trend from the beginning of the 1990s until 2007 in Estonian housing market, which was driven by economic development, consumer’s expectations and easily accessible credit. Increasing housing prices made it possible for households to borrow more using housing wealth as collateral. In Estonian housing market and also in other countries, the financial sector has most of the times directly or indirectly been the main force behind the housing booms and crises. Added features here have also been poor monetary policy and government policies which encourage affording homeownership. In year 2007 real estate bubble in Estonia burst and from that time until 2010 a rapid decrease in prices followed. The situation in housing market stabilized at the end of 2010, moved into slow growth in 2011 and into fast growth phase in 2012. This study shows that compared to previous housing bubble, the situation has improved and there is not a housing boom currently in Estonian housing market. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_83&r=ure |
| By: | Wu, Wenjie |
| Abstract: | Over 140 billion CNY (1GBP=10CNY) has been spent between 2000 and 2012 in Beijing on the construction of new rail transit lines. Such massive investment allows me to examine the consequences of transport improvement for land prices nearby new stations. Conventional hedonic techniques for valuing rail access mask the changing nature of geographical links between land parcels and stations induced by rail transit expansions. This paper improves on previous literature by applying a spatial multi-intervention difference-in-difference approach to estimate the heterogeneity in the capitalization effects of rail transit development for residential land uses in Beijing. The results show that residential land parcels that receive increased station proximity experience appreciable price premiums, but the relative importance of such benefits varies over space. These findings lend to support the evidence that public investment has an essential role to play in spurring the spatially targeted land market and provide implications for further land and transport policy making in China. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_340&r=ure |
| By: | Zaleczna, Magdalena |
| Abstract: | Housing private finance initiative (PFI) schemes are used for cooperation of local authorities with private partners to build, improve, manage and maintain social housing stock in UK. They can be seen as competitive solution for privatization of public stock. These schemes should enable a transfer of risk from public sector to the private sector and give good value for money. After some years of British experience with housing PFI there is possible to evaluate results and analyse where there are some bottlenecks. The author would like to outline British experience and consider the possibility of transferring housing PFI into Polish conditions. In Poland the picture of housing structure is very patchy: after waves of privatization of public housing stock the current housing structure is very blurry, mostly in big cities. Very high bonuses for tenants – buyers created the mixture of owners: local governments and individuals (due to different levels of income, some of them have problems with housing maintenance). Their aims and level of interest and understanding of housing technical and functional problems are very various. The very important housing supply side actor in socialist time - housing cooperatives are mostly inactive, focused only on survival, currently. Thinking about housing as a very important factor for national economy and social life, there is an important question of new solutions implementation in these circumstances, remembering also about great needs in area of regeneration confronted with cuts in public spending. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_310&r=ure |
| By: | Pitros, Charalambos |
| Abstract: | Purpose – The economic, political and social significance of housing bubbles is enormous. Since the mid-1980s, the UK housing markethas experienced two succeeding bubble-bust cycles, in the periods 1985/6-1989 and 2001/2-2007. These bubbles differed both in lengt and in how they ended. However, the affordability benchmarks behaved in almost exactly the same way in both cases. The majority of authors identify two ways in which a bubble can end (i.e. after the bust 'end regimes'): prices could crash suddenly, in a relativel short period of time or can move in a transition to another regime, such as slow deflation. The aim of this paper is to adjust this theory and to examine whether and why the way a housing bubble stops growing (i.e. 'growth-end regimes') affects its length, how afordability may be relevant to this and whether housing affordability can guide our investments decisions. Design/methodology/approach – The methodology focuses on cross-case analysis of the above two UK housing bubbles, using research methods such as literature review, historical analysis, regression-correlation analysis, normality tests and quality control charts. Findings – The findings reveal that the way a housing bubble ends is inherently related with affordability and that can also largely explain its length. Moreover, certain rates of housing affordability can generate a simple core theory for optimal investment decision-making in the UK housing market. Originality/value – This is the first study that examines whether the way a housing bubble stops growing affects its length and how affordability can guide our investments decisions. The paper also presents a novel use of quality control charts in the UK housing market. The results of this study can shed light on the extent to which theories of bubble end-regimes and affordability indices can offer better investment information. This paper will help real estate researchers, professionals (appraisers) and individual mortgage borrowers to better understand the nature of housing investment, thus contributing by reducing stress in the residential housing market. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_4&r=ure |
| By: | Anghel, Ion; ; Vlad, Poenaru |
| Abstract: | The real estate market is influenced by different economic and social factors. Our research considered theory of mononuclear and polynuclear city types in terms of residential market connections with economic overview and data interpretation.Based on analysed data changing in real estate residential prices and market activity is highly correlated with demografic and economic factors but also with the type of the city (mononuclear vs polynuclear).Mononuclear cities (60.000 – 200.000 inhabitants) experienced a uniform decreasing in the average price central vs periferic areas and reduced real estate market activity.Polynuclear cities (200.000 – 2.000.000 inhabitnts) presented non uniform evolution in prices and important real estate market activity.An important conclusion is about the expected evolution of the real estate market; based on our reasearch the polynuclear cities has more chance for future development active real estate market but in mononuclear cities there is an important chance to find economic decreasing and reducind in real estate market activity. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_244&r=ure |
| By: | Anop, Sviatlana |
| Abstract: | Purpose - Similar development of economic fundamentals in Germany over the last fifteen years did not lead to dramatic house price increases as in Sweden. What can explain this house price stability over a long period? This paper attempts to find the answer this question. Design/methodology/approach - A comparative analysis approach is used to examine the differences in the banking sector policies on mortgage financing and approaches to valuing the mortgage properties in two case countries – Germany and Sweden. Findings - The extreme rise in Swedish house prices above the long-term trend was created by expanding bank lending policies. Excessive bank lending was not a sole reason for increase in prices, but was supported by the general macroeconomic factors and regulation environment determining supply and demand on the housing market. Banks should implement mortgage lending value as a base for mortgage lending together with amortization requirement for mortgage loans. Lending limits based on mortgage lending value will contribute to the stability in house prices in the long term period and it will create a safe lending environment on the housing market. Originality/value - The paper contributes to a better understanding of necessary conditions for the house prices to rise in the long run above the fundamentals level and suggests policy solutions that can reduce the risks of housing bubbles and increase financial stability. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_271&r=ure |
| By: | Cheng, Yu-Chun; Lin, Jen-Jia |
| Abstract: | The previous studies applied the transaction price to explore the relationship between job accessibility and housing cost and concluded that transaction price and job accessibility are positively correlated. After The Financial Tsunami in 2008, investors turned their capital to more stable investment targets, which include real estate markets, and have resulted in elevated property prices worldwide in recent years. Consequently, house rentals have been getting more important while have not been well explored before. To fill the research gap, this study empirically investigates the job accessibility effects on apartment rentals using sample data in Taipei, Taiwan.This study examines the effects of job accessibility on apartment rentals for different markets, which include building types, and apartment types, and for different transportation modes. There are five hypotheses examined in this study: H1: job accessibility positively affects apartment rentals; H2: the effects of job accessibility on apartment rentals are different among various transportation modes; H3: the effects of job accessibility on apartment rentals are different among various building types; H4: the effects of job accessibility on apartment rentals are different among various property types; and, H5: the effects of job accessibility on apartment rentals are different among various rentals. To examine the hypothesis, this study employs a gravity-type job accessibility index and uses 9,157 observations in Taipei metropolitan area in 2009 as the study sample. The linear regression and quantile regression are both used to analyze the sample data.The results show that job accessibility is positively associated with apartment rentals. And, different building types and property types have different effects of job accessibility on apartment rentals. Also, different accessibility of transportation modes have different effects on apartment rentals. Furthermore, the accessibility effects on low rentals are significantly larger than that on high rentals.The empirical findings of this study make two important contributions to the literatures. First, this study presents new evidence regarding the effects of job accessibility on apartment rentals. Previous studies focused on transaction prices instead of rentals. Second, the findings of the present study provide a reference for governments in developing housing strategies using land-use and transportation measures. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_53&r=ure |
| By: | Ploegmakers, Huub; Beckers, Pascal; van der Krabben, Erwin |
| Abstract: | This paper explores the relationship between the planning environment and investment in commercial and industrial buildings in the Netherlands. Most past research on the impact of the planning environment on outcomes in real estate markets has investigated the impact of regulation on (house) prices, with the majority of studies indicating that increased planning restrictions lead to higher prices. However, these studies do not consider the impact of planning on construction activity directly. Furthermore, most existing empirical work has narrowed the effect of the planning environment to the impact of development controls. In addition to a measure of restrictions on industrial land release, this paper incorporates an indicator of regeneration initiatives for rundown industrial sites into a model of investment in buildings on industrial sites. Whereas planning restrictions are generally expected to exhibit a negative impact on new construction (this paper also explores the impact of planning constraints on investment in modernization and refurbishment), the latter measure is assumed to capture some of the positive impacts of planning. In fact, one of the main objectives of regeneration initiatives for rundown industrial sites is to stimulate private investment in new and existing buildings on these sites. This study makes use of micro data on expenditure in modernization, refurbishment and new buildings by firms located on industrial sites. In this regard, we use data on non-residential building permits issued by Dutch municipalities between 1997 and 2008. Besides the local planning environment, this paper also considers the impact of other location variables such as accessibility as these are assumed to increasingly dominate investment activity at more disaggregate spatial levels. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_212&r=ure |
| By: | Hofmann, Marina; Linke, Hans Joachim; Müller, Nikolas; Pfnür, Andreas |
| Abstract: | The German cities Frankfurt, Munich and Stuttgart approach their climate protection initiatives in the real estate sector with different measures although their goals are nearly the same. This paper examines the underlying efficiency understanding and further limitation factors in the municipal decision-making process. The focus is on the requirements and promotion of energy efficiency and greenhouse gas reduction in real estate.As a part of a research group supported by the Deutsche Forschungsgemeinschaft (DFG) we have an interdisciplinary look at these cities and make use of the Institutional Analysis Framework by Elinor Ostrom (1990) to collect and to aggregate decision-making impacts. Therefore, qualitative as well as quantitative data analyses based on a document analysis and interviews with representatives from the municipalities and the real estate sector are used to model the exogenous constraints of a city as well as the local decision-making arena.There seems to be evidence that cities take into account different efficiency approaches to legitimate their climate protection decisions. First results show that the decision-making process is characterized by an owner-, user-, or producer-oriented real estate management perspective. This fact heavily influences the measures taken, first and foremost the financial impact on the respective stakeholder.This paper categorizes urban strategies to reduce greenhouse gas emissions in the real estate business by identifying influencing factors in the municipal decision-making process. These findings will help to make use of the enormous greenhouse gas reduction potential existing in the metropolitan real estate sector. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_172&r=ure |
| By: | Dubé, Jean; Legros, Diego; Thanos, Sotirios |
| Abstract: | Spatial econometrics has been widely applied to Hedonic Pricing models in the literature to determine spatial spillover effects between house prices in close proximity. An approach is developed here to test for a short-run market expectations effect: the degree to which the expectations of sellers and market intermediaries (e.g. agents, lawyers, and surveyors) affect the final house price. This is the information effect on potential house buyers from asking price setting in the market. We employ a typical dataset composed from sales observations each at a specific location and distinct moment in time. An emerging body of literature demonstrates that the temporal dimension of such data, when ignored, has serious implications for spatial autocorrelation models. By following this approach, we can further utilise the spatiotemporal patterns in such data to successfully decompose the market expectation effects from the typical spatiotemporal spillovers. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_132&r=ure |
| By: | Hill, Robert |
| Abstract: | Purpose - One way of detecting departures from equilibrium is by comparing house prices and rents. Here I assess the viability of this approach.Design/methodology - Error-correction models (ECMs) based on price and rent indexes can be used to forecast movements in house prices. The short-term forecasting ability of ECMs is limited though due to the long persistence of departures from equilibrium. ECMs also suffer from the limitation that they do not tell us whether the price-rent ratio is above or below its equilibrium level at any given point in time. To answer this question it is necessary to make cross-section comparisons of prices, rents and user cost (i.e., the cost incurred by owning a house).Findings - A meaningful cross-section comparison requires that prices and rents are quality adjusted. This may require the use of hedonic methods. The equilibrium price-rent ratio (which is derived from the user cost) is difficult to compute since it depends on the expected capital gain. Also, both the actual and equilibrium price-rent ratios differ depending on which segment of the housing market is considered. Originality/value - The housing market, which is prone to booms and busts, can very significantly affect the rest of the economy. Hence it is important that central banks and governments can detect when the housing market is out of equilibrium. I show here how difficult it is to detect such departures. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_59&r=ure |
| By: | Blau, David; Haurin, Donald |
| Abstract: | Housing subsidies are often justified by claims that high quality housing improves households’ economic and social outcomes. The goal of our research is to undertake a comprehensive empirical study of the causal impact of housing characteristics on the cognitive, behavioral, and health outcomes of children and young adults. The primary hypothesis is that the quality of a child’s dwelling has a positive effect on child outcomes in both the short and the long run, holding other factors constant. Other key hypotheses are that the effects of housing differ by race, ethnicity, and income. In particular, we expect that there are diminishing returns to housing quality, so housing effects will be more important for low income children. We study this issue using child production function models. There are few studies of the impact of the attributes of dwellings on child and young adult outcomes. Most existing studies have focused on the impact of homeownership compared with renting. Using mostly U.S. data they suggest there is a small positive impact on selected child and young adult outcomes of being a homeowner. But very few studies have measured the impact of crowding or building type on child outcomes.We merge rich longitudinal data on child outcomes (National Longitudinal Study of Youth and Child Supplements) with information on the respondents’ house characteristics (Zillow data). We then analyze both the short and long term effects of house characteristics experienced during childhood. Examples of child outcomes include math and reading cognition, health, and behavioral problems. Examples of young adult outcomes studied include graduation from high school, wages, employment, and criminal convictions. Examples of dwelling characteristics include the square footage of the dwelling and lot, number of bedrooms, type of structure (single or multifamily), location, whether owned or rented, persons per room, and interviewer observations of the home environment. The study will clarify whether housing policies should be directed towards encouraging homeownership, toward dwellings’ quality, or if there is no measureable effect on child outcomes. A particular focus will be on the outcomes experienced by the children of low income parents. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_73&r=ure |
| By: | Lee, Jae-Kwang; Ke, Qiulin |
| Abstract: | As numerous transport infrastructure projects have been implemented, recent years have witnessed a significant increase in transport network in urban and regional areas. A number of studies have been undertaken to examine whether transport improvement impacts commercial property values and have found that proximity to public transits leads to an increase in rental values of commercial properties. Few studies, however, have focused on investigating the relationship between change in accessibility and commercial property values with a longitudinal analysis. This study therefore seeks to investigate how change in accessibility impacts commercial property retail values. A gravity-type accessibility indicator will be developed in order to enhance the measurement of accessibility in the analysis. This accessibility will gauge accessibilities of commercial properties to the market potential for two time points: 2000 and 2010. Drawing on that accessibility indicator and commercial property attributes collected from private companies, this study will develop a longitudinal econometric model to analyze the impact of the change in accessibility on commercial property rental values. A hypothesis to be tested is that an increase in accessibility does not lead to a rise in rental values of commercial properties. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_325&r=ure |
| By: | Swidler, Steve; Schorno, Patrick; Wittry, Michael |
| Abstract: | This paper extends the existing literature on managing house price risk. While previous work finds that a hedger would have reduced a large amount of variance in housing returns in Las Vegas, Nevada using a static in-sample strategy in Chicago Mercantile Exchange (CME) futures contracts, we show that neither static nor dynamic strategies would have maintained an effective hedge during the significant decline in housing prices. The inability to hedge house price risk using CME contracts ultimately calls into question the long-term viability of housing futures. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_5&r=ure |
| By: | Peng, Chien-Wen |
| Abstract: | Dependency rate is an indicator of demographic structure which usually be used to measure the pressure on productive population. A high dependency ratio can cause serious problems for a country if a large proportion of a government's expenditure is on health, social security and education, which are most used by the youngest and the oldest in a population. Many previous studies found that dependency rate was the main determinant of household saving or wealth accumulation. This study tries further to clarify whether demographic changes, especially dependency rate, affecting housing prices. The empirical results reveal that house price is cointegrated with fertility rate and old dependency rate, respectively. In the long run, an increase of fertility rate increases house price. However, an increase of old dependency rate reduces house price. The expected demographic change in 2015 would be an important signal of housing price change. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_163&r=ure |
| By: | Logan, Callum |
| Abstract: | Purpose - This is a background discussion and literature review relating to the application of methods to measure the impact of a significant earthquake event on house prices. The purpose of this review is to select an appropriate methodology to be applied to the assessment of earthquake impacts on Christchurch house prices. The results of this review will form part of a further research paper.Approach - Previous literature specific to hedonic modelling of earthquake events and their impact on housing is limited. Therefore, a wider review of natural disaster events and types of methodologies used are undertaken in this paper.Findings - The Christchurch earthquake land zoning process combined with government compensation that followed the 2010 earthquake is unique. The literature review suggests that a hedonic pricing modelling using a Difference-in Difference specification may be the most appropriate model for an event of this nature. Value of research - It is anticipated that the outcomes of the proposed further research will assist in the identification of risk management strategies for the insurance industry, central and local governments. This type of research also has relevance for other earthquake prone cities as well and the methodologies could also be applied to other natural disaster risks such as floods, hurricane and storm surge risk zones along coastlines. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_32&r=ure |
| By: | Breuer, Wolfgang; Schaeling, Dominique |
| Abstract: | With the introduction of the JESSICA (Joint European Support for Sustainable Investments in City Areas) Initiative, the European Commission aimed at strongly enhancing investments in urban areas to meet the steadily increasing requirements, arising from urbanisation, for European cities. One major challenge now is to find out where the establishment of so called Urban Development Funds (UDFs), with their revolving nature, is a suitable means to achieve this goal. A concept for the determination of funding targets for UDFs is discussed in this paper with the help of three subsequent steps – distance, movability, and capital market imperfections of cities – which we name the DMI approach. The first step is the determination of urban differences by an indicator-based analysis with the definition of the distance to a benchmark city. This reveals cities which have a need for investments in urban areas. Second, the measurement of funding efficiency as a device to quantify movability of cities defines the next step. This step helps to identify cities which should be supported technically to achieve more impact from the funded investments. Finally, the third step is the provision of market imperfections given by the sensitivity of investment needs to the three market failures of external effects, imperfect competition and incomplete information. With the third step, cities which need investments in urban areas are separated into those which are finally eligible for UDFs and other funding candidates.With this overall approach we achieved to merge a high number of information into a neatly arranged separation of cities. As a final result, we obtain those cities which should be supported by UDFs and we also identify if further technical support is appropriate. This is demonstrated by an example on Italian cities. The DMI approach contributes to research on UDFs by introducing a conceptual way for the determination of urban funding target areas which is up to now absent in literature. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_116&r=ure |
| By: | Salzman, Diego A. |
| Abstract: | The hierarchical Property Ladder is often said to encapsulate the British housing market. This overtly rational investment driven theory is explored in its truthfulness. Behavioural biases are shown in house price data for the British market over the last two decades. Additionally, survey responses seems to provide evidence that the Property Ladder approach to housing is poorly understood, and, somewhat ironically, irrational behaviours maybe being exaggerated through the belief of the social construct |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_24&r=ure |
| By: | Fuerst, Franz; Oikarinen, Elias |
| Abstract: | This study uses a unique dataset of the Finnish housing market to investigate the hypothesised link between energy efficiency and house prices. It explores the following research questions: 1) Does the energy efficiency rating of a dwelling have an independent impact on its price and if so, how large is the price effect? 2) Does the energy efficiency rating affect the liquidity of housing? 3) Does a high energy efficiency rating always translate into lower maintenance costs (and vice versa)? 4) Has the capitalization of energy efficiency ratings into prices changed during 2006-2012, as the rating system has matured and the awareness of the rating system has grown? 5) Do the lower maintenance costs induced by energy efficiency fully capitalise into house prices? Controlling for a large number of spatial and property characteristics, we find that a low energy efficiency rating affects the price negatively but do not detect a significant premium for higher-rated buildings in most estimations. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_40&r=ure |
| By: | Jay, Graeme |
| Abstract: | There has been a high rate of urbanization and influx of people into the Central Business District (CBD) and inner city of Johannesburg, South Africa over the last thirty years. One of the consequences of this rapid urbanization is a severe housing shortage, especially for lower income individuals. Investors and developers need to have a sound business case when making any investment in real estate; more so when the target market is tenants seeking affordable housing as these tenants are extremely sensitive to rentals that do not fall within a certain range. One of the questions that arise is what factors encourage or discourage private sector investment into affordable housing in a large city like Johannesburg in a developing country like South Africa.Various developers, property managers and asset managers were surveyed to assess their views regarding the factors that encourage or discourage private sector investment into affordable housing in Johannesburg.The purpose of this paper is to:•Consider the relevant literature, in an international context, regarding the factors that encourage private sector investment in the inner cities of major cities, especially in developing countries; •Consider what factors are specifically relevant in Johannesburg;•Share the results of research conducted with various developers, property managers and asset managers; and•Suggest what factors will encourage private sector investment in the inner city of not only Johannesburg, but also other major cities in South Africa, as well as other developing countries and whether or not these differ from the factors identified in the international literature. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_147&r=ure |
| By: | de La Paz, Paloma Taltavull; White, Michael |
| Abstract: | In a previous paper (Taltavull and White, 2012) we analysed the role of money supply, migration and mortgage finance in house price evolution. Using a VECM framework we examined these variables together with income, inflation, and interest rates for both Spain and the UK. This followed on from research by other authors including Muellbauer (2007), Meen and Andrew (2003), and Mishkin (1995). The results indicated an important role for income, mortgages and migration in UK house price movements, more so than in Spain. In this paper we build upon our previous work and focus on the channels through which liquidity shocks can affect house prices. Lastrapes (2002) argues that money supply affects real house prices. Greiber and Setzer (2007) find that liquidity is important for new supply and hence house prices identifying money demand, asset price and credit channels. In the money demand channel, three different effects are present, wealth, substitution and transactions effects. This permits us to test of changes in house prices lead to changes in money supply. In the asset price channel we test if changes in money supply cause house price change, and in the credit channel, higher housing collateral can increase loan amounts. In this paper we test different channels to identify which is more or less important and whether this varies across countries thus identifying the impact that the housing market has on the macroeconomy and from which source this is derived. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_187&r=ure |
| By: | Ramón, Sotelo |
| Abstract: | During the electoral campaign for the general elections held on 22nd September 2013 the lobby group representing the tenants proposed a rent regulation in the housing sector concerning also new contracts for existing housing beyond social housing. This proposal was immediately included into their political agenda by the social democrats (SPD) and very shortly afterwards also taken as a position by chancellor Merkel as leader of the Cristian Democratic Party (SPD), although many doubts were expressed within her own party. Only the liberal party opposed to any type of rent control, but did in the end not enter parliament. After elections a coalition between the Social Democrats and the Cristian Democratic Parties was established and the implementation of the rent control fixed. This paper analyses the political reasons for the behavior of Angela Merkel, looks at the expected results from this rent control concerning the allocation of flats, the proportion of home-ownership, the ongoing segregation within cities, and the future construction of new housing. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_245&r=ure |
| By: | Lin, Tzu-Chin; Huang, Fang-Hsin |
| Abstract: | Housing price in Taipei has been soaring to an exceedingly unaffordable level. Most critics have placed blame on the demand side for the oversupply of capital seeking investment opportunities. This is certainly true, but also seems to be only a partial explanation. For the high price of a good or asset, demand and supply factors shall both be at play. Several recent studies have repeatedly argued that stringent land use regulations shall be responsible in some US cities for their unsustainably high price of housing. This is a supply-side explanation. We would like to through this article add one more supply-side argument for a high housing price phenomenon, at least for a densely populated city such as Taipei. For a city where land plots are small and land ownership is fragmented, its supply of land is almost bound to be inelastic and slow in adjustment. Housing price is in consequence susceptible to how land is supplied. Difficult as it may be, demand-side problems of housing price might be overcome through monetary or fiscal policies. But what makes this supply-side ownership issue a concern for policy is that any coercive measure to force owners to sell his plot or merge it with others is fairly impractical. We employ Gini Coefficient to measure changes in the distribution of size of sites in Wanhua station areas over time before land development. This study area is where Taipei was firstly developed and redevelopment is now in need. It is found that over time the distribution of site size has become increasingly uneven. In addition, a significant proportion of the large sites came from the merger of small sites. However, this assembly process has taken a period of time longer than a usual economic life of buildings. It is therefore difficult not to conclude that the anticommons in land development is in place and has led to an inefficient use of land, thus a tragedy. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_69&r=ure |
| By: | Bonifaci, Pietro; Copiello, Sergio |
| Abstract: | In the last years several studies about the relationship between buildings' energy performance and residential property prices in Europe have been published. Nevertheless, there is a lack of studies regarding the Italian real estate market, probably due to the difficulties to access official data on property characteristics and transactions prices.Following the recast of European Commission's Energy Performance of Building Directive (2010/31/EU), since 2012, in Italy, is mandatory to provide information about energy performance on the real estate advertisements for the sale of a property, including energy label and CO2 emissions. Buildings are rated on a scale A to G, with A being the highest rating.The purpose of this research is to evaluate the impact of buildings' energy performance, as expressed by Energy Performance Certificates (EPCs), on the prices of residential properties in the city of Padua, representative of medium-size cities in Northern Italy.The study is based on a hedonic price model which aims to estimate the impact on house prices due to the improvement of energy performance. The study adopts a semi-logarithmic regression model. The analysis is performed on a dataset of nearly a thousand dwellings, listed on websites for property sales.The model considers as dependent variable the offer prices of dwellings, and includes indipendent variables that represent attributes such as location, typology, dimension, mainteinance condition and other features, as well as the energy label.The dwellings are all located in the city of Padua, with the exclusion of some areas of the city centre, in which the location variable could prevail on the others independent variables. The data collection period lasted from July to September 2013.Empirical findings show a positive and statistically significant relationship between buildings with better EPCs and house prices. Furthermore the relationship is stronger from class G to C, than from class C to A. The price premium for a higher energy rating is tested for robustness and consistency. Nevertheless, the study reveals a negative gap between the net present value of potential future savings and the estimated price premium. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_38&r=ure |
| By: | Tyvimaa, Tanja; Zahirovic-Herbert, Velma; Gibler, Karen M. |
| Abstract: | Houses are expensive illiquid long-lived assets traded in an imperfect market. The imperfect nature of the market is a result of several factors, including the heterogeneous nature of the houses, asymmetric information among buyers and sellers, search costs, and transaction costs. These aspects of housing markets make the selling transaction a process rather than an event and, therefore, we observe two outcomes of this process: selling price and liquidity. There is evidence that the degree of liquidity of housing assets changes over time. That is, adjustments in the housing market seem to take place not only through prices and quantities but also through the degree of liquidity; i.e., how easy or difficult it is to sell a property as of a specific date. While much analysis has been done on how various attributes influence the selling price of a house, less work has been done on the factors influencing liquidity. This paper uses quantile regression for duration analysis allowing for a flexible specification of the functional relationship and of the error distribution. Censored quantile regression addresses the issue of right censoring of the response variable that is common in duration analysis. We apply this method to a large sample of housing transactions in Finland as well as to different subgroups of housing sales and sales during different housing market cycles. This way we examine how the effect of attributes on marketing duration may differ along the distribution of marketing times. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_63&r=ure |
| By: | Sundrani, Deepak |
| Abstract: | An identical house in a different location is not priced the same. This is because a home-buyer does not pay only for the physical construction but for a lot of externalities like location, amenities, etc. Many authors have pointed out that most home-buyers have to make a trade-off, such as location for the size of the house, etc. In this paper, the researcher has tried to explore which segment of the urban home-buyers, give priority to which factor. The Hypotheses are that Price is the most important influencing factor for buyers of a small house ( 1 Bedroom + Hall + Kitchen), Location is the most important influencing factor for a moderate size house ( 2 Bedrooms + Hall + Kitchen) and Amenities is the most important influencing factor for a large house ( 3 Bedrooms + Hall + Kitchen). The study was carried out in Pune ( in India). A sample of 600 home-buyers ( 200 of 1 BHK, 200 of 2 BHK and 200 of 3 BHK, who had recently purchased a house were administered a structured questionnaire and the empirical analysis proved that for 1 BHK and for 2 BHK, the hypotheses were proved correct, but for 3 BHK the Product characteristics were the most important influencing factor instead of the amenities. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_64&r=ure |
| By: | Gu, Guowei; Michael, Lynne; Cheng, Yapeng |
| Abstract: | Given its importance, housing has recently once again become a red-hot topic for politicians, economists and others in many western countries, derived mainly from the housing market failures such as unaffordability and short of supply. This prompts new interest in the area. Housing studies has attracted the attention of academics for some time. But the focus has been more on price and demand side than on supply side.DiPasqualh (1999) raised the question of “why don’t we know more about housing supply?â€? and offered the explanation that this is “because there is so little information where the unit of observation is the builder, investor, or landlord.â€? One decade later, the problem of lack of segregate supply side information still haunts housing researchers. “Aggregate data is sufficient for addressing cross metropolitan variation and works well for documenting housing market time series.â€? But without incorporating the micro data of the individual supply units, it is difficult to better understand the individual behaviour that determines these aggregate patterns. (Murphy, 2010)By using the data of 907 individual housing projects from the official website managed by Shanghai Housing Administration Bureau, the registration of the projects on the website being mandatory for all housing developers who want to sell the housing in the market and the information being public access free, the paper tries to unravel the mechanism of how land supply, one of the fundamentally important inputs, influences housing supply by investigating three issues: 1) how aggregate housing supply responds to major external economic and financial factors which include land supply; 2) how the land supplied is developed to produce the housing supplied in terms of area (square meter) and unit (flat or house); 3) how long the production process lasts from the purchase of land to the marketing of housing.DiPasqualh, D. (1999) Why don’t we know more about housing supply? Journal of Real Estate Economics and Finance, 18:1.Murphy, A. (2010) A Dynamic Model of Housing Supply. PHD thesis, Washington University in St. Louis. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_62&r=ure |
| By: | Cao, Albert |
| Abstract: | China’s housing market has had 18 years of rapid price inflation. To prevent deterioration of affordability, from 2005 to 2013 the central government used a combination of administrative interventions and macro-economic measures to contain housing price rises. However, centrally formulated housing policies and intervention measures could not be fully implemented at local levels and thus have only limited short-term successes. From 2013, the central government retreated from direction intervention at the national level and left local governments to intervene to contain renewed rapid price hikes. This paper analysed demand and supply in China’s housing market and evolution of institutional arrangements that increase demand but distort supply using data obtained from fieldwork conducted in 2011 and 2013. It argues that localisation of intervention could be more effective than the one-size-fits-all approach adopted by the central government but reforms on institutional arrangements that prioritise high-end housing market and housing investors rather than owner occupiers are necessary to re-position the housing market to the middle class and ease affordability problems. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_160&r=ure |
| By: | Wong, Siu Kei; Wu, Hao |
| Abstract: | Despite the global financial crises, Australia has experienced continuous high-speed growth in housing prices in recent years. Its housing market can be separated into two major segments: single-detached houses and medium-density apartments. This study seeks to examine the price trends of these two segments and explain their differential movements. Based on the Real Estate Institute Victoria (REIV) member agencies survey since the early 1990s, we found that house prices grew faster than apartment prices in Melbourne. In particular, the price gap between houses and apartments was much larger in central Melbourne than in the outer areas. To explain this, we borrow Clapp et al.'s (2012) real option idea and postulate that the gap reflects the redevelopment potential of the houses. We verify this by testing if the gap is smaller for suburbs with stronger redevelopment restrictions (e.g. due to zoning constraints). As far as applicable, other factors such as socio-economic characteristics are also considered. While this study contributes to a better understanding of differential housing price movements, we are aware that the test is delimited by the use of median price indices, which may not hold quality constant. Further study based on constant-quality prices, such as hedonic or repeat-sales indices, are needed. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_199&r=ure |
| By: | Beekmans, Jasper; van der Krabben, Erwin; Martens, Karel |
| Abstract: | In this paper we explain differences in the development of value between a designated type of urban areas: industrial sites. The aim of this paper is twofold. First, industrial sites in the Netherland are prone to rapid decline (Buitelaar & van der Krabben, 2011) and although regeneration policies to counter the effects of decline are very common (Ploegmakers & Beckers, 2012), the process of decline itself remains under researched. Secondly, existing studies on urban and neighbourhood decline usually apply qualitative methods to research decline in one city or selected areas of a few metropolitan areas (Ellen & O'Regan, 2008). For this paper, large scale quantitative methods are applied to research the influence of a variety of site specific and (regional) economic characteristics on the development of value of all industrial sites in the Netherlands.Based on existing studies on gentrification, urban decline and neighbourhood decline we argue that the development of value is a proxy for the process of decline of urban areas. It is believed that industrial sites that under perform in terms of development of value as compared to the average development have experienced more decline than sites that have performed well. The development of value in the period 1997-2008 of the industrial sites in our dataset is calculated using the aggregate of the values of individual properties on industrial sites.The conclusions of this paper provide more insight into what factors influence the process of decline. These insights can also be helpful for urban policy makers in making the present policies more efficient when it comes to both regeneration and development of new industrial sites.ReferencesEllen, I. G. and K. O'Regan (2008). Reversal of Fortunes? Lower-Income Urban Neighbourhoods in the Us in the 1990s. Urban Studies 45 (4): 845-869.Ploegmakers, H. and P. Beckers (2012) Evaluating Regeneration Policies for Rundown IndustrialSites in the Netherlands. Working Paper 8. The Hague, PBL Netherlands Environmental Assessment Agency.Van der Krabben, E. and E. Buitelaar (2011). Industrial land and property markets: market processes, market institutions and market outcomes. The Dutch Case. European Planning Studies, 19(12), 2127-2146. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_171&r=ure |
| By: | Rengarajan, Satyanarain; Hin, David Ho Kim |
| Abstract: | Throughout the OECD world and beyond, localised cluster based initiatives have increasingly being seen as the main industrial policy option to sustain regional competitiveness and economic prosperity (OECD, 2000). Industrialized nations in particular have come up with large scale plans to develop what is known in the literature as the 'Knowledge Based Urban Developments' (KBUD). This paper focuses on the urban design aspect of such large scale long term developments which has been given less importance in the planning literature. The paper discusses two important challenges related to land use design planning currently faced by planners of such specialized spaces. Firstly, Long term land use designs have become inefficient tools to guide development as they are constantly subjected to changing market forces. Second, design criteria for fostering interactive environments remains sketchy for such knowledge precincts. We discuss one possible design criteria with a primary aim to enhance 'knowledge interactions' between different participants and their relevance to progress of knowledge intensive communities. Using the unique criteria a new framework for a simple land use design model (LUDM-KBUD) is proposed using Agent Based Modelling (ABM) technique. Such a land use design model can help planners to develop physical planning guidelines in a continuous manner that would create a spatial design with the goal of maximizing knowledge/information interactions between participants. The research will provide planners with an alternative dynamic methodology to design such long term post-industrial mixed use developments. Future work in this direction and their ensuing implications on zoning practices of Knowledge Based Urban Developments (KBUD) and similar large scale urban developments will also be discussed. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_33&r=ure |
| By: | Iwata, Shinichiro; Naoi, Michio |
| Abstract: | The existing literature has shown that increases in housing wealth, driven by unexpected house price shocks, have a positive effect on birth rates of homeowners. According the canonical model, a decrease in housing wealth has a symmetric negative impact on fertility behavior of households. That is, housing gains and losses of the same size should have identical quantitative effects (in an absolute sense) on fertility. In comparison, the theory of reference-dependent preferences suggests that people care more about housing losses than about equivalent gains, leading to an asymmetric housing wealth effect on a fertility decision. In our model, a utility from having a baby is weighted by a utility from house price where reference levels based on the house price at the time of purchase. The theoretical model suggests that the probability of giving birth is kinked at a reference housing wealth level and the wealth effects are discontinuously larger below the kink than above the kink. This theoretical prediction is tested using the recent survey data of Japanese households (Keio Household Panel Survey, KHPS). The KHPS is a nationally-representative, large-scale panel data started in 2004 with initial sample of approximately 4,000 households. Our empirical results suggest that, consistent with the theoretical prediction, homeowners' fertility responses are substantially larger when their housing wealth is below its reference level than when housing wealth is above reference level. Specifically, while estimated marginal effect is significantly positive when housing wealth is below its reference level, it is still positive but insignificant when housing wealth is above reference level. Furthermore, we also find that asymmetric wealth effects are robust to a number of alternative specifications, including controlling for possible measurement errors and unobserved heterogeneity of households. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_299&r=ure |
| By: | Ryu, Jongpil |
| Abstract: | Uncertainty of global economy has been increasing after fiscal crisis in America and Europe. Consequently, real estate asset and office market in Europe has been unstable also. Whereas interest in office market in has increased, studies explaining difference in natural vacancy and rent adjustment rate in European cities are incomplete. Natural vacancy means vacancy rate at equilibrium, and gap between actual vacancy rate and natural vacancy rate plays important role in rent adjustment process. This paper explains natural vacancy rate and different rent adjustment rate in major European cities using quarterly date set since 2000. Results say that natural vacancy rate exists each city and rent adjustment rates are different in those cities significantly. Difference in rent adjustment rate informs that elasticity of excessive demand or supply is different in those cities. Further researches investigating factors that influencing rent adjustment rate are needed. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_215&r=ure |
| By: | Akinbogun, Solomon Pelumi; Oyedokun, Tunbosun |
| Abstract: | Commercial properties are mostly in high demand in cities; the demand becomes more profound in cities that serve as administrative headquarters of a region, state and country. Without doubt, commercial properties normally command higher rental value per square meter than many other uses. This explains the reason behind the conversion of most residential properties at the Central business districts to commercial properties. Therefore, Real estate investors tend to invests in this investment vehicle in various locations for optimum returns. However, the breakthroughs in information superhighways and the increasing adoption of ICT seem to have undermined the performance of commercial properties given the resultant flexibility associated with change in business and commercial operations. This paper seeks to examine the unique characteristics of high rise commercial properties in capital cities where demand for office spaces is at the peak. It takes a global view of the issue by considering a European and an African capital city namely Edinburgh and Akure to examine the inherent risk in such property. Based on the findings, the paper would provide useful advice for commitment of capital for the development of office property in city periphery. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_173&r=ure |
| By: | McLean, Aliz; Horvath, Ã?ron; Kiss, Hubert Janos |
| Abstract: | This paper presents a case study from Hungary on the effect of greater energy efficiency on residential housing prices, using a dataset on real estate transactions. The sample consists of all transactions from 2003 to mid-2012 in a treatment and a control group in Budapest's third district.The paper uses a difference-in-differences framework to test whether prices in a large block of flats - the largest in Hungary - which underwent major energy-efficiency related renovation developed differently following the renovation than prices in comparable, neighbouring blocks. Our results show that the renovation resulted in prices 9.42% higher than they would have been absent the renovation, which amounts to over 1 million Hungarian forints on the average flat. This can be contrasted with around 70 thousand forints in yearly energy savings and the 1.3 million forint cost of the renovation per flat. The latter implies that outside funding may also be required to make investment into energy-efficient renovation worthwhile. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_117&r=ure |
| By: | Christensen, Bjarke; Sørensen, Tony Vittrup |
| Abstract: | The presence of spatial correlation in the error terms is a well-known concern in the estimation of hedonic real estate valuation models. Several methods have been devised to address this issue in order to improve precision of parameter estimates and model predictions. When the hedonic model is used for valuation of externalities or amenities, such as noise or green spaces, focus is on reducing omitted variable bias on parameter estimates. In this context, interpretability of the spatial component is paramount. In the context of appraisal or automatic valuation, focus is primarily on out-of-sample prediction performance. This dichotomy of objectives implies a potential trade-off between interpretability of parameter estimates and out-of-sample prediction accuracy. Here, we compare four methods in terms of their suitability for amenity valuation and real estate valuation respectively. These include an aspatial OLS model, the fixed spatial effects OLS model, the spatial error model and a spatial generalized additive model utilizing a soap film smoother over geographic coordinates. Each model is estimated under differing spatial specifications, utilizing a rich, Danish dataset, and the trade-off between predictive accuracy and stability of parameter estimates for a spatial variable of interest is studied. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_96&r=ure |
| By: | de La Paz, Paloma Taltavull; White, Michael |
| Abstract: | In a previous paper (Taltavull and White, 2012) we analysed the role of money supply, migration and mortgage finance in house price evolution. Using a VECM framework we examined these variables together with income, inflation, and interest rates for both Spain and the UK. The results indicated an important role for income, mortgages and migration in UK house price movements, more so than in Spain. Financial deregulation, and increasing monetary integration have been the background against which flows of liquidity have increased. Increasing interbank flows have also linked markets in different countries providing increased liquidity that can impact the mortgage market. Traditionally, monetary policy used interest rate changes to affect GDP. However this policy tool impacts asymmetrically in Eurozone economies and is generally constrained by the highly internationally interconnected money market. In this paper we build upon our previous work and focus on the role that changes in liquidity have played in the evolution of house prices. In doing this we identify the main channels of transmission affecting the housing market. In addition we also consider how the housing market, being impacted by increased liquidity can also feedback to aggregate money supply. The models tested examine Spain and the UK and identify short run and permanent effects in the relationship between liquidity and house prices. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_135&r=ure |
| By: | Kania, Katarzyna; Telega, Agnieszka; Wegrzyn, Joanna |
| Abstract: | Zoning plans are the basic legal acts regulating spatial planning in Poland and they determine the rules of building and development of land by investor. Local government is not obliged to draw up the plans. The content of plans does not necessarily cover the entire territory of municipality. Nowadays not all municipalities have current plans and hence the planning situations can differ a lot. One of the consequences is that formal determinants of predevelopment phase investment process are different. Investor who wants to build on land without zoning plan is required to apply for planning permission prepared for each person.The next step to start building process is obtaining building permission. In practice that, the most important determinant among the conditions which have the greatest impact on investment decision is planning situation. The purpose of article is researching the impact of changeable planning conditions on investment activity of real estate developers in chosen cities in Poland. Authors want to verify the research hypothesis, which is the investment activity is increasing on the areas which are covered by local zoning plans.In order to verify the hypothesis, authors will analyze nature and territory of local zoning plans, as well as building permissions obtained both from the local planning and planning permission (particularly if the location of investment. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_242&r=ure |
| By: | Lin, Tzu-Chin; Yu-Hsuan, Tseng |
| Abstract: | Lack of land for a large project in Taiwan is not only a problem for housing but also for office and retailing development. In order to satisfy the requirements for eminent office spaces and high-end shops to be located in a prime location, developers often engage in the assembly of a number of contiguous sites. In spite of numerous studies into land assembly for housing development, very little research has been undertaken to examine office or retailing development. Studies on land assembly for housing development have highlighted the problem of land fragmentation and its effects on later development, including development pace and pattern. We set out in this study to examine how land is assembled for office and retailing development in one of the major commercial areas of Taipei. The study area is Sinyi shopping area where both Taipei 101 Building and Taipei City Hall are located.Our expectation is that small sites need to be assembled into a larger one before those large-scale projects are possible. With the help of detailed cadastral and ownership records, we measure the degree of land fragmentation over time. We hope through this study to understand how commercial sites are assembled and how the degree of land fragmentation changes in response to the market conditions and development pressure. Also, we hope to understand why after over 30 years, some sites have now developed into high-end offices and department stores, but some fairly expensive sites next to them are still left idle. All these findings could significantly improve our understanding of how Taipei grows and if land at prime locations is in an efficient use. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_67&r=ure |
| By: | Esen, Bugra Kagan |
| Abstract: | In the last couple of years, urban renewal practices in Turkey, has become a more interesting topic for researchers than ever. One reason is that, the evidences of these decade-lasting projects have now become physically tangible and thus, subject to a spectrum of concerns. The other reason, however, relates more to the top-down style that these projects are implemented. Most of the time, it is argued that, the decision making process heavily depends on the local or central governmental authorities, which lack the participation of the people as well as the academic or civil parties. In light of these facts, this paper questions in what extend it is possible to modify –or flex- urban renewal projects according to changing times and conditions, which represent a timeline of administrative, legal, technical, social, political and financial aspects. On one hand, from the authorities viewpoint, it is seen crucial to make solid decisions and comply with these projects without hesitation. On the other hand, it is not always possible to foresee what time would bring and make decisions to cover this fourth dimension. In this paper, one real-life example from the capital city, the New Mamak Urban Renewal Project including 18.000 dwellings, has been analyzed to show how things may get out of hand due to changing conditions in time and how modifications may be needed in the half way. This paper aims to contribute to the real estate sciences in the sense that; complicated and long lasting urban renewal projects can be better accomplished if some flexibility techniques, as suggested in the paper, can be taken into consideration in a well established way. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_177&r=ure |
| By: | Rossini, Peter; Kupke, Valerie |
| Abstract: | In the past decade governments in Australia, both state and federal, have provided assistance to first home buyers in an effort to improve the availability and the affordability of housing as well as to stimulate interest in the housing market. Subsidies and tax breaks have been offered which are anticipated to encourage borrowing and to increase market activity. This study considers the effectiveness of such policies through an analysis of price, the time on market of a property before sale and the relationship between advertised price and actual transaction price for periods associated with the introduction of such subsidies. The study uses both descriptive and statistical analysis to quantify the effectiveness of the policy in terms of improving housing affordability and increasing market activity. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_285&r=ure |
| By: | Hefferan, Michael J. |
| Abstract: | Industrial sectors and the property assets that support them evolve over time and are shaped by a range of economic, financial, technological, community and political forces. The past two decades have seen remarkable and compounding changes in these areas – underpinned by rapid rises in consumption levels and globalisation of markets. All these have resulted in the contraction of traditional manufacturing activities across practically all OECD countries. In Australia in particular, new forms of 'industrial' uses have emerged. These emergent changes have significant economic and land use impacts and are yet to be fully appreciated by and incorporated into statutory planning schemes. Hence, a closer examination of the spatial relationship between these new forms of industrial activity and surrounding urban land is now required particularly to identify the challenges for the existing asset bases and urban layout. More positively however, there also appears to be opportunities to develop innovative forms and structures to accommodate these evolving uses, which are neither as intrusive nor locationally bound as industrial uses of decades past.This research is based on literature, interviews, focus group discussions and case studies in eastern Australia. Once the nature of changes in industrial land uses are defined and understood, then the interface between these emerging industrial activities and other urban land uses can be better integrated and aligned. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_5&r=ure |
| By: | Barthélémy, Fabrice; Des Rosiers, Francois; Baroni, Michel; Amedee-Manesme, Charles-Olivier |
| Abstract: | Since the second quarter of 1998, and with the exception of the 10% downturn experienced in the first half of 2009, apartment prices in Paris have been rising steadily. Their pace of growth even accelerated from early 2010 onward and, unless interest rates are raised to their historical trend levels – which remains highly improbable, most “arrondissementsâ€? are still expected to experience value rises over the years to come due to both the relative scarcity of apartment supply and the profile of buyers that are little affected by the current European economic crisis. In the presence of market heterogeneity, the ability of traditional appraisal methods to capture the true property market value may be questioned and emerges as a major issue for local authorities that collect property tax as well as for mortgage lenders confined to tight lending provisions in a crisis context. Assessing such differences in a reliable way is a step forward towards improving mortgage lending risk management. In this paper, the heterogeneity of the Paris apartment market is addressed through assessing the differences in both the hedonic price of housing attributes and price appreciation over time for various price, hence income, segments of the housing market. For that purpose, quantile regression is applied to the 20 “arrondissementsâ€? as well as to the 80 neighborhoods, or “quartiersâ€? (each “arrondissementâ€? is composed of four “quartiersâ€?) and segmented constant-quality house price indices are computed and compared with an overall index. The database, which is provided by the Chambre des Notaires de France, includes cases spread over a 17 year period, that is, from 1990 to 2006. Housing descriptors include, among other things, the building age, the apartment size and the number of rooms, the floor level, the presence of a garage, the type of street and access to building (boulevard, square, alley, etc.) as well as a series of location dummy variables standing for the “arrondissementsâ€? and “quartiersâ€?. Preliminary findings suggest that, during the slump, extreme prices by and large define the efficient frontier, with higher returns being reported for lower-price, central apartments as opposed to a lower volatility for upper-price, outlying ones. During the recovery and boom stages of the cycle, the optimal portfolio is obtained through a blend of middle-price apartments, with a lower volatility and higher returns for central and outlying “arrondissementsâ€?, respectively. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_106&r=ure |
| By: | Ding, Hsiu-Yin |
| Abstract: | The main objective of urban renewal is to improve neighborhood environment by reconstructing obsolescent buildings. There are three approaches for implementing urban renewal projects in Taiwan but developers prefer reconstruction to renovation and maintenance of buildings. Local government creates lots of criteria to define the qualified buildings which could be reconstructed. The basic criterion could be the life of buildings. Due to the renewal area should be involved continued lots; some new buildings could be planned into a renewal project. This might lead new buildings to be reconstructed when they are young. Constructing a building costs a lot and it should not be demolished just because of the reason of urban renewal. Therefore, in this paper, the building life of approved urban renewal units was examined for analyzing the efficiency of urban renewal projects in real estate market. The data of Construction Licenses, Usage Licenses and Demolition Licenses of the buildings involved in urban renewal projects were used for the analysis. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_191&r=ure |
| By: | Lin, Tzu-Chin; Huang, Fang-Hsin |
| Abstract: | Fragmented land ownership is widely believed to be responsible for the difficulties in assembling the contiguous land parcels for a more dense development. In order to acquire a large number of small land parcels, an often excessively-high price needs to be paid, if and only if all the owners finally agree to the price. Even if all parcels are assembled, the soaring land price is to a large extent responsible for a high housing price. It has been therefore in many studies concluded that the fragmentation of land ownership tends to lead to an inert supply of land, and given a strong demand, will subsequently contribute to an elevated housing price.The above arguments seem to fit well into the scenario of Taipei City. Taipei is the capital and largest city in Taiwan, with a density of 9,593 inhabitants per km2 and a growing, though steadily, number of households. In addition, the housing price in Taipei has been overvalued by 38% and 27% compared to the fundamental prices derived from price/income and price/rent relationship, respectively. In order to accommodate the expanding demand for housing, fragmented land has to be assembled to pave way for the later development. In other words, developers will constantly purchase and consolidate small parcels into a larger one in a single ownership prior to the construction of new houses. Despite the theoretical and practical significance, little research has looked into the measurement of land fragmentation and the changes in the degree of fragmentation in the course of building activities. Understanding of land fragmentation is crucial for a comprehension of how land is priced, and how land is assembled and developed. This study examines in-depth the area of Wan-Hwa train station where was developed earliest in Taipei. We analyse the changes in land titles of every single parcel from 1970s through 1990s that cover at least two property cycles. Developers over the course of two property cycles must have engaged in land assembly for their building projects. Borrowed from other research fields such as agricultural productivity and income inequity, we apply Gini Coefficient, Simpson Index and Januszewski Index respectively to measure the distribution of land titles (shares) in this area over time. We will also examine the changes in the degree of land fragmentation within the context of property cycles. It is hoped that through observation of changes in the distribution of ownership on land, how land is assembled and buildings supplied in a city where housing affordability is a daunting problem can be better understood. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_173&r=ure |
| By: | Chow, Yuen Leng; Ong, Seow-Eng |
| Abstract: | In this paper, we aim to analyze the importance of traditional social networks in selling real estate. In recent years, the use of various social networking sites like FaceBook, LinkedIn is ubiquitous, to the extent that these social networking sites are now commonly used as a tool by real estate brokers to expand and maintain their client network. However, the use of social networks as a link to establish business opportunities is not new. In a business context, business associations, university alumnus gatherings, cultural associations, country clubs, etc., are avenues where business contacts can be formed. Thus, in this paper we are interested in exploring the question of whether a more 'traditional' social network has an impact on a real estate broker's sale performance. More specifically, we are interested to see whether 'culture' affects sales performance.In the extant literature, there is a rich literature on real estate brokerage that analyzes agent's performance, listing and selling of the properties through the multiple listing services, the impact of incentives (commission) on agent's performance, and the asymmetric problem for a property sold by owners and for a property sold by agents. There are also papers that analyse, from an information angle, the impact of the use of internet on sales performance. In this paper, we look into the question of whether real estate brokers close more deals with people of their own cultural background. We intend to analyse this question by employing both a regression and probit model to examine the significance of a common cultural background on a real estate broker's sale performance. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_164&r=ure |
| By: | Paolo Seri (Department of Economics, Society & Politics, Università di Urbino "Carlo Bo"); Tommaso Ciarli (SPRU - Science Policy Research Unit) |
| Abstract: | The paper analyzes both internal (to the firm) and external (geographical) determinants and obstacles to small firms’ relational and organizational adaptability in mature Italian industries. While presenting a review of the literature accounting for the two dominant typologies of adaptation in Italian mature industries, the chapter emphasizes the lack of systematic analysis on the influences of negative agglomeration externalities on both typologies of small firms’ adaptability. The empirical section distinguishes between district and non-district firms and controls for internal and external determinant to firms adaptabilities. Some interesting results follows regarding the influences played by Italian industrial districts. |
| Keywords: | Regional Structural Change, Firms Behaviour, Cognitive Anchoring. |
| JEL: | R11 D21 D22 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:urb:wpaper:14_03&r=ure |
| By: | Coskun, Yener |
| Abstract: | The objective of the paper is to define conditions of mortgage market development in Turkey by presenting the findings of dynamic causal relationships between housing loans and selected socio/macro-economic indicators for the term 2005/01-2011/09. By using monthly time series, we employ granger causality tests, co-integration analysis and vector error correction model (VECM) in the research. The paper specifically aims to analyze the impacts of financial stability, financial risks, monetary policy, households' income/net wealth and housing demand to mortgage credits. We conclude based on the co-integration analysis that housing credit, interest rates, occupancy permits, real GDP per person and monetary aggregate (M2) have long term relationship with housing credits in Turkey. In the paper, we argue that the outcome has important policy implications for both Turkey and emerging economies. In this context, we underline that mortgage market policies in emerging economies should have a balanced approach between market economy and social needs. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_11&r=ure |
| By: | Lausberg, Carsten; Wojewnik-Filipkowska, Anna; Rymarzak, Malgorzata |
| Abstract: | A considerable part of the European property portfolio is owned by municipalities. In a market economy this raises several important questions, for instance whether the real estate management in public administrations is as efficient and effective as in private institutions. We address this question by looking at one important detail: the ways decisions are made in European cities. Surely this aspect cannot fully answer the question, but it can deliver meaningful hints for further research and for improvements in practice.The first part of our paper contains a review of the literature on decision theory and public real estate management from which we derive a number of current issues in municipal real estate decision making. In the next chapter we analyze the literature on the real estate portfolios of selected European cities which leads to a classification of public properties. Since the data is scarce and not much research has been done in this field we take an in-depth look at three best-practice cities to find out about the decision making processes in practice. For each city we describe the current situation (Example: 'How many properties are managed by how many employees?'), the strategy (Example: 'Is 'creating public value' a strategic objective?'), the organization (Example: 'Is the real estate management centralized?'), and the decision making process (Example: 'When do employees deviate from the defined decision making processes?'). We conclude our paper with a summary of the findings from the case studies and some suggestions for other cities how to improve real estate management by improving the decision making processes and instruments. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_250&r=ure |
| By: | Wahlström, Marie |
| Abstract: | In line with directives from the European Union, member countries have adopted measures aiming to reduce the energy use in the real estate sector. In Sweden, sellers of residential housing have to provide potential buyers with an energy certificate with detailed information on energy performance and consumption. The idea is to make users more aware of their energy consumption and of different ways to reduce it. This paper studies to what extent the energy certificates for single-family house owners in Sweden, introduced in 2009, seem to work in the way expected. More specifically, the following questions are addressed: • What role does preferences and household characteristics play for energy consumption as compared with the energy related attributes of their house? E.g. does energy consumption depend more on technical installations such as heat pumps or is household composition a stronger influencer? • Is there a willingness to pay more for houses with “betterâ€? energy performance? How large is this price premium? An econometric approach is used to address the questions. Energy consumption is related to both housing attributes, including energy-related factors, and household characteristics, including income. A hedonic price model is used to analyze implicit prices for the various attributes. A unique feature is the large set of energy-related attributes included in the database (all single-family houses sold in Sweden 2009-2010), which also comprises individual household data. To our knowledge, this is the largest empirical work performed in Sweden on this matter. The results will be compared with those of similar studies. However, the Swedish case is interesting in itself. In Sweden, 3% of the disposable income goes to energy consumption; twice as much as the EU average. Our data represents three different climatic zones. The average annual temperature varies from -5 in the north to 9°C in the south, which is quite unique in an international perspective.Preliminary results show that the energy consumption in a house is partly depending on the building’s characteristics, such as vintage, and partly on the household’s characteristics, such as size and composition. The hedonic model shows that there is a price premium for energy efficient houses. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_331&r=ure |
| By: | Vermiglio, Carlo |
| Abstract: | This paper analyses the contribution that public real estate management (from here PREM), can provide to the enhancement of LGs performance and to the creation of public value for the community.More in details, the research will focus on a specific segment of public property portfolio, the so called “social housingâ€?, for addressing the main issues arising in the management of this segment of assets; moreover, the research wants to highlight the connection between public property management and sustainability of an LG.The paper is structured as follows: the first section describes the scope of the research; the second section provides the theoretical framework in which the research fits; the third section analyses actual issues, criticisms and trends perceived in the field of “social housingâ€?. The renewed interested on this topic arise the claim for a new welfare system that involves both public and private sector. More in details, a private support to the implementation and improvement of public strategies it is required in order to fully meet citizens’ expectations and to conceive social value. The last section presents a case study analysis of some “social housing programsâ€? launched within Italian Local Governments. The analysis confirms the importance that property management strategies assume for LGs. Furthermore, it emerges that social housing programs - structured to provide/ enhance the empowerment of social conditions and sustainability of a community - are “key factorsâ€?. Their implementation requires a greater efforts from public managers, whose mission and vision has to be orientated towards the creation and consolidation of social value and urban development. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_178&r=ure |
| By: | Eni, Sabariah; Adair, Alastair; Cheng, Lay; Lim, Jasmine |
| Abstract: | Urban regeneration has always been seen as an expansive and pervasive measure-s to policy making decisions. Despite the challenges in this period of economic uncertainty and financial constraint, urban regeneration is viewed as a key driver of economic, physical and social growth. However sustainable economic growth demands considerable investment to finance the development and associated infrastructure. The traditional practice to finance the development is by way of public investment. This places a huge burden on governments in terms of raising sufficient investment. One possible alternative financing tool is value capture. Large public investment in infrastructure can substantially increase the value of land in close proximity to the development. Capturing the value of this benefit through land use policy and alternative financing instruments is increasingly important to urban regeneration projects. This study explores an alternative financing mechanism designed to capture the uplift in land value due to development activity. This paper examines how the concept of “value capture� in terms of its prospect and challenges can be applicable to stakeholders in urban regeneration decision making in Kuala Lumpur city centre. Here the particular interest is to explore the arguments for value capture as a tool for funding and how this does relates to land management and land markets in urban regeneration context. A case study in Kuala Lumpur demonstrates the potential for application and effectiveness of a land value capture model as an alternative financing vehicle in promoting urban regeneration. Initially a literature review is conducted on the subject matter as well as in depth interviews with the property players and discusses various aspects of its applicability in the context of Malaysia. The outcome of this paper comprises recommendations for more viable strategies and policies that land value capture offers to finance urban regeneration and make a significance contribution to research which is currently on going. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_21&r=ure |
| By: | Lyons, Ronan |
| Abstract: | How legitimate is it to use asking price information in the absence of transactions prices? And how does the gap between the two vary over the market cycle? This paper examines these two issues by comparing two large datasets from Ireland's property market over the volatile period 2001-2012. It finds that the two series are extremely closely correlated, both across space and across time, suggesting that in illiquid markets, or in the absence of transaction price datasets, asking prices offer a very good proxy. Nonetheless, a bid-ask spread exists at any given point in time. By exploiting information on the various stages of a housing transaction, it is possible to estimate the bid-ask spread in the housing market. That spread ranges from +4% at the height of the market in 2007 to -7% in 2010. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_244&r=ure |
| By: | Esen, Bugra Kagan |
| Abstract: | It has been more than a decade now, since the inflow of foreign money has created a real estate boom in Turkey, which was a globally safe harbor. In addition with the lower rate mortgage loans, Turkey’s property values have skyrocketed. Many independent research works show that real estate is by far the best investment choice of the Turkish people. As they become wealthier, they tend to buy more and more properties. It is interesting to analyze; what is the motivation of buyers when they consider such a property purchase and what kind of properties do the Turkish people demand as they obtain surplus money?The two questions may have some many answers, which can be reduced to two: function and status. For single property owners, function generally means a larger, safer, warmer, living place with better features. Function, for multiple property owners, also means a money flow from monthly rent.Status, however, is a more interesting issue. Some properties in major cities are purchased for prestige, where their values cannot be justified by functionality or rent inflow. This is also because some properties are limited in quantity or may not be available at once. Waterside residences in Istanbul for instance, may be sold for up to tens of millions of Dollars. Every major Turkish city has such extremes, which are also high in number. This Paper’s contribution to the real estate sciences may be twofold: It questions the property valuation parameters in a more macroeconomic awareness and it may theoretically help well-off individuals find different ways of investment. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_68&r=ure |
| By: | Lyons, Ronan |
| Abstract: | Fiscal policy and the allocation of public resources is often done on purely a cost basis, rather than a cost-benefit basis, with the implicit assumption being the calculation of benefits is not possible. At the same time, there is growing recognition among social scientists that house prices can be used to develop estimates of the value of access to a range of location-specific amenities, including national cultural heritage.This research uses a large and detailed dataset covering the Irish residential property market over the period 2006-2012 to investigate whether six categories of national monument in Ireland, from castles and country houses to holy wells and stone monuments, are reflected in house prices. Both price and rent effects are estimated, while income elasticities are also explored. Lastly, as the dataset covers both boom and bust periods, the stability of the valuations is also explored. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_238&r=ure |
| By: | de La Paz, Paloma Taltavull; Juarez, Francisco |
| Abstract: | The literature approach the lack on housing as one of the consequences of household poverty. This paper turns around the argument and assesses how housing tenure triggers poverty situations. It estimates several affordability indicators associated to housing tenure, finding empirical evidence of different poverty threshold among Spanish households depending on their tenant status. Using micro-data of the Survey of Quality of Life for Spain , data is segmented by residential tenure and calculate poverty lines for homeowners, renters (both at a market prices and below market prices) and the free housing , the four tenure formulas existing in the Spanish housing market. Results suggest that high ownership rate has prevent from poverty to a large number of homeowners with income below the poverty line, especially after the economic crisis in Spain. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_22&r=ure |
| By: | Gabrielli, Laura |
| Abstract: | Property is an important sector in Italy, as it represents the largest component of household wealth, and homeownership greatly prevails (around 80%). The construction sector is an important contributor to domestic economy (about 15% of the GDP), with a moderate negative trend of the gross fixed capital formation experienced in the last few years. Credit crunch and weak economic prospects hit the property market, reducing house prices and, above all, freezing capital flows and dramatically bringing transaction volumes down. This raised concerns about the weakness of the property market during the current downturn. This paper presents an approach called clustering analysis applied in order to identify different conditions of the Italian property market. The approach helps to understand the behaviour of the market and offers its characterization. The approach was applied to the last 15 years of data on Italian real estate market using a variety of demand-side variables and supply-side variables, such as the number of transactions, house stock, house prices, building permits, mortgages. The analysis has been conducted analysing data organised at Regional Level and Local Level (Provinces). Custer analysis is then used to determine the composition of different submarkets and to characterise them, in order to understand their different conditions and to assess the weakness of the different submarkets during the current downturn. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_215&r=ure |
| By: | Saxinger, Andreas; Nachtsheim, Michaela |
| Abstract: | For many decades long-distance busses were never of great importance in Germany. This part of public transport was almost exclusively provided by railway transportation. Legally, railway transportation was protected from competition. Applications for long-distance bus line concessions had no chance of success.However the amendment of the German Federal Passenger Transportation Act to 1st January 2013 liberalized the German market for long-distance busses significantly. Entrepreneurs still need an official concession, but for granting concessions, it is irrelevant, whether other bus or railway companies already operate the transportation service applied for. On long-distance transportation routes competition between different bus companies is now possible. Parallel operations are allowed.Within a short time applications for many new connections from different companies were submitted. The acceptance of domestic long-distance bus services by passengers is extremely high. Nevertheless, it becomes evident, that new infrastructure in the form of central long-distance bus terminals for the passengers is required. The German Federal Legislator provides no regulations for this type of infrastructure. The German Federal Passenger Transportation Act only knows the term “bus stop�, which requires signage by the bus company (minimal standard.Long-distance bus terminals can be planned in central or peripheral areas of a city. The location depends on the individual case, e.g. if local authorities contribute financially to the construction of the building or finance the construction of the building completely. Beside urban-planning reasons, also reasons of city marketing can be of importance. The actual operation of the terminal is often transferred to external operators. External operators finance themselves by user fees and rental income from shops and offices. It is essential that external operators act neutrally and non-discriminatory towards all terminal users. In addition, rules are required regulating the possible congestion of terminals operated by external operators. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_63&r=ure |
| By: | Klotz, Philipp; Lin, Tsoyu Calvin; Hsu, Shih-Hsun |
| Abstract: | The PIGS countries stand in the spotlight of the current financial crisis in Europe. The boom and bust of the real estate sector was one of the major sources putting these countries into an economic downturn. This paper determines the extent to which these countries experienced property bubbles and sheds light on the role of monetary policy in the formation of bubbles. We draw from Stiglitz’s (1990) theory on asset bubbles and apply the direct capitalization approach through weighted average cost of capital (WACC) to identify real estate bubbles in the period from 1999 to 2012. In the next step we apply VAR and VECM models to investigate short- and long-run dynamics between the monetary policy of the ECB and property bubbles in the PIGS countries. Our findings indicate that Spain and Ireland experienced the largest positive bubble formation, followed by Portugal with a small bubble. In contrast to that, Greece experienced a strong negative bubble. While we find only a very weak short-run relationship between monetary policy and bubble formation in Portugal, we find both, evidence for a long- and short run relationship in the case of Ireland, Greece and Spain. The varying extent of the bubble formation and the differing impact of the monetary policy on the bubble across the PIGS countries can be mainly attributed to characteristics in the domestic financial-, fiscal- and macroprudential-system. This paper provides strong evidence that countries with very low interest rates and low to moderate tax rate as well as high loan-to-value ratios have the potential to experience large property bubbles. Central bank’s policies are crucial to trigger the boom and burst of property bubbles by manipulating the interest rate and availability of lending for house purchase. As this research only covers aggregate data for entire countries, diverging developments within each country are not captured. Future research could contribute to the literature by focusing on property market developments in specific cities or regions. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_144&r=ure |
| By: | McAllister, Patrick; Street, Emma; Wyatt, Peter |
| Abstract: | Through economic booms and slumps, the supply of housing has failed to keep pace with demand. The political solution to this problem has consistently focused on the supply side of the equation. The speed of the economic downturn in 2007/8 left many developers with extant planning permissions for residential developments across the country. The Government believes that if it can persuade developers to 'get Britain building' this will provide a Keynesian kick to the economy and go some way to addressing the supply and demand mismatch. But as moribund economic conditions continue, it is clear that sites are not being developed in significant numbers; they are "stalled". But why are they stalled, how many dwellings do they represent, where are they and what sort of housing schemes are involved? Organisations such as the Local Government Association and the Campaign for the Protection for Rural England have argued that the supply of housing sites is adequate with planning permission for over 400,000 housing plots unimplemented. The typical opposing view from the House Building Federation is that "Too many sites are now 'under water' due to charges levied on them by central and local government. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_259&r=ure |
| By: | Wardner, Pamela |
| Abstract: | Developers of large-scale greenfield master planned communities (MPC) in South-east Queensland (SEQ) Australia have been 'mandated' to provide employment opportunities in their greenfield development project sites. While not explicitly written into legislation, it has been heavily promoted by state and local governments and urban planners alike.The encouragement of mixed-use concepts such as an MPC contributes to the achievement of two economic objectives sought by local government – maximising local employment opportunities (self-sufficiency); and encouraging the local capture of employment (self-containment. However, current MPC data shows increased cross-suburban travel instead of minimising state and local government's journey-to-work objectives. MPC employment centres also have shown higher than average vacancy rates compared with surrounding commercial areas. Therefore, if the concept of mixed-use in a complete MPC is philosophically a sound urban objective, why then does this situation not manifest itself as envisioned by the state and local planners and MPC developers? Hence, this research assesses the value-add of 'mandating' these employment centres to be incorporated in large-scale greenfield MPCs.This research is exploratory in nature as it provides an understanding of the market processes and operations in creating a successful MPC employment centre. An extensive literature review, semi-structured interviews and observations was used to develop a theoretical framework. It also uses the Delphi technique to distil expert opinion and achieve group consensus.The findings of this research have wide implications on public policy and urban planning particularly in the creation of the employment component in mixed-use developments. Employment centres located within an MPC are intrinsically two distinct projects, an economic development project and an urban development project. While MPC developers can provide the urban form and an environment conducive for firms to locate, the underlying economic fundamentals to attract firm locators to the area are beyond the scale and reach of MPC developers, which will ultimately drive the success of any employment centre. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_8&r=ure |
| By: | Sager, Daniel |
| Abstract: | Purpose - Excess supply in real estate markets is easily measured by means of vacancy rates, whereas no such measure exists for excess demand, which is the more interesting situation for investors. Design/methodology/approach - We use a basic search model for describing the influence of supply and demand on time on market. Similar to the literature on equilibrium vacancy rates, we derive equilibrium time on market using a multiple regression approach. Equilibrium time on market is reached when real prices are stable. Time on market of individual real estate units can then be compared to equilibrium time on market for the market segment considered. This allows the deduction of market situation results (excess supply / demand) for market segments, as well as for individual characteristics of real estate units.Findings - We find that time on market serves as a useful indicator for excess supply and demand in the housing market, especially in markets where price setting is subject to regulation. Furthermore it is possible to derive an indication of the actual state of demand for the individual characteristics of real estate units.Research Limitations/Implications: Results are promising, when a clear market typology exists and the characteristics of individual real estate units are well described. Originality/value - Time on market is mostly known as a measure for liquidity. In given (local) markets it can also serve as a measure for excess demand / supply with much more potential for market research than vacancy rates. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_237&r=ure |
| By: | Dermisi, Sofia V. |
| Abstract: | This paper studies the agglomeration of office skyscrapers across the USA, Europe the Middle East and Asia (198, 22, 34 and 294 buildings, respectively). The paper analyses the construction trends around the world, of skyscrapers 600ft (183 m) or more, focusing on construction periods, material use, location, economic, political conditions and agglomeration patterns. The initial results of the study suggest that agglomeration patterns across some newly founded skyscraper cities are not always attributed to the traditional economic factors. In addition, differentiations are evident between the types of structure (e.g. steel versus composite) and agglomeration timing and patterns. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_257&r=ure |
| By: | Rokhaya Dieye (Department of Economics, Université Laval); Habiba Djebbari (Department of Economics, Université Laval); Felipe Barrera-Osorio (Harvard Graduate School of Education, Harvard University) |
| Abstract: | When one’s treatment status affects the outcomes of others, experimental data are not sufficient to identify a treatment causal impact. In order to account for peer effects in program response, we use a social network model. We estimate and validate the model on experimental data collected for the evaluation of a scholarship program in Colombia. By design, randomization is at the student-level. Friendship data reveals that treated and untreated students interact together. Besides providing evidence of peer effects in schooling, we find that ignoring peer effects would have led us to overstate the program actual impact. |
| Keywords: | Education, social network, impact evaluation |
| JEL: | C31 C93 I22 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:aim:wpaimx:1435&r=ure |
| By: | Yuo, Tony ShunTe; Lin, Yu-Cheng; Wu, Jou-Hsuan; Huang, Kuan-Yu |
| Abstract: | Spatial complexity is not only one of the crucial sources of wayfinding problem within a shopping facility; it is also a significant determinant for space usage efficiency. The distribution of total floor area for a shopping mall is basically finding the optimum solution for tenant location/allocation and pedestrian flow plans. Normally, with higher spatial complexity, shoppers are easier to get lost and generate higher shopping costs; however, space usage flexibility could also be increased. Therefore, a good measurement for spatial complexity for shopping areas is needed. This paper compares several measurements for spatial complexity. The intention is to tackle the spatial complexity issue through three dimensions: horizontal complexity, vertical movements and multiple-purposive users in mixed use environment. And the data is collected from the US, UK, Taiwan, Singapore, Hong Kong, Malaysia and Shanghai with more than 100 floorplans to explore the influential factors for spatial complexity within shopping centres. Using GIS, space syntax and other non-spatial techniques, this research suggests some interesting management issues and enhances the understanding of spatial complexity within a shopping environment. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_46&r=ure |
| By: | De KONING, Kees |
| Abstract: | In the U.K. public housing policy has sought to achieve (at least one of) three distinguished goals: to provide shelter and accommodation for all families, to encourage home ownership and to encourage construction as a tool of counter-cyclical macroeconomic policy. Over the last decade, individual households in England and Wales, especially the young and the below-median income ones, have struggled to buy or even rent their homes. For the most needy, income support and housing benefits are being granted to enable them to pay rent. More recently the U.K. government established a scheme to help first time buyers to get onto the property ladder. No scheme exists however, which would help the underprivileged to save more when house prices and rents rise faster than average wages. Such a scheme could be called the Home Individual Savings Account or HISA. The scheme will help to nullify the gap between average house price movements and average wages. Who could be eligible for participating in the scheme and how it could work is set out in this paper. |
| Keywords: | Home Individual Savings Account (HISA), savings depreciation, U.K. house prices and wages movements, underprivileged income earners, U.K. housing policy |
| JEL: | E21 E32 E61 R2 |
| Date: | 2014–07–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:57548&r=ure |
| By: | Verheul, Wouter Jan; Daamen, Tom |
| Abstract: | Within planning theory a new paradigm has been introduced: discursive planning. In this paper we want to elaborate how this concept can be applied to urban development projects. A discursive perspective on real estate development implies that there is a continuous debate about the content of specific real estate development projects, its meaning, its resources and its connections with urban policies. Especially the way connections are made between abstract urban policy programmes on the one hand and specific urban development projects on the other hand, is the central focus of our paper. We have selected two case studies in the Netherlands in our empirical data set: the case of 'Brainport Eindhoven' in relation to the 'High Tech Campus' and the case of 'Mainport Rotterdam' in relation to the 'Stadshavens project' (waterfront developments at former port areas). This study focused on the connections and disconnections between the development of strategic urban area development projects (so-called micro-narratives) and the cities' and regions' larger social, cultural and spatial development policies (so-called master narratives). In addition to Minzberg, Ahlstrand & Lampel (1998) we will introduce a model for 'emerging strategy'. Urban development projects are a combination of strategy and emerging developments (even coincidence) as chance events that occur within the context of the project. In the first paragraph of our paper we will introduce our research topic and outline. In the second paragraph we will describe theoretically the shift from traditional planning to deliberative and collaborative planning and we will introduce our ideas about an emerging strategy for urban development and real estate projects. In paragraph three we will explain which cases are selected and why. Based on desk research (vision documents, planning reports, notes of meetings, et cetera) and in-depth interviews with key players, we've collected al lot of empirical data which we will present in paragraph four (Brainport case) and five (Mainport case).In paragraph six we will make a comparison between the two in-depth cases studies and we will show how an emerging strategy model can be implied in the practice of urban development. In the final paragraph seven we will present our conclusions in general for theory building as well as some application for development practices in a highly complex and interdependent world of urban development projects. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_202&r=ure |
| By: | Awuah, Kwasi Gyau Baffo; Hammond, Felix; Lamond, Jessica; Mahama, Sulemana |
| Abstract: | Consensus signifies that the cost of compliance with land use planning requirements is a major link to the weakness of sub-Saharan Africa urban land use planning systems. Yet scanty knowledge exists on the extent and magnitude of the cost of the sub-region's urban land use planning systems. This is compounded by the complexities associated with conventional quantitative methodologies usually used in the developed world to estimate the cost of land use planning policies and their huge volumes of organised data requirements. This study initially examines these conventional methodologies and nature of sub-Saharan Africa urban land use planning systems based on evaluation of the extant literature. Subsequently, a customised methodology(ies) is proposed taking cognisance of insights from the conventional methodologies, nature of the sub-region's planning systems and its organised data constraints. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_31&r=ure |
| By: | Liang, Jiancong; Wong, Siu Kei; Chau, Kwong Wing |
| Abstract: | The capitalization rate used in real estate literature is the ratio of net operating income to property value. This paper has investigated the capitalization rate movements in Hong Kong from 1987 to 2012. In Hong Kong, capitalization rates for residential and commercial properties were closely intertwined during 1984-1997. However, after 1997, diverging patterns were observed: commercial properties' cap rates became higher than residential properties'; cap rates for lower-end properties increased relative to higher-end properties. What are the factors that determine the cap rates in Hong Kong?What are the causes that generate such gap between different properties types' cap rates in Hong Kong? Based on the basic Gordon model, WACC and CAPM, the study seeks to explain the cap rate movements in Hong Kong by modelling it as a function of the risk-free rate, risk premium, and expected long-run rental growth. Our preliminary results show that the cost of debt, stock market performance, unemployment, CPI inflation, and price growth are significant determinants of cap rates. At the same time, the LIBOR/HIBOR ratio and price growth are significant determinants of cap rate gaps. Additionally, the cap rates would also adjust to its lagged term due to autocorrelation. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_69&r=ure |
| By: | Lee, Nai Jia; Yeo, Qianyi |
| Abstract: | In recent years, it has become a usual practice for buyers of public housing in Singapore resale market to fork out additional cash upfront to sellers to sweeten the deal. This additional cash premium, also known as cash-over-valuation, ranges from 10-20% of the valuation of the property. The amount of cash-over-valuation paid in the secondary market has been consistently high, despite Government intervention to soften the market. This phenomenon has generated concerns among the public on housing affordability and the valuation methodology adopted. Even though it is reasonable for transacted price of the property to vary ±15% from the valuation in appraisal report, it seems puzzling to observe the variation to be persistently positive. What makes it even more puzzling is that both buyers and sellers know the valuation of the house before the transaction is completed. Given that the objective of the appraisal report is to reflect the true value of the house, we expect the rational buyers and sellers to set their agreed price near the valuation reported. We suspect that buyers and sellers use the appraisal report as a source of information on the supply of units of similar attribute to derive their bargaining power. In this paper, we attempt to find out the determinants of the cash-over-valuation. As we do not have valuation data on the appraisal reports, we derive the valuation using the Hedonic Regression approach to proxy the sales comparison approach. As the cash-over-valuations for each district are published for some years, we use them to corroborate our valuation. After controlling for possible market exuberance and anchoring behavior, we found preliminary evidence that the valuation reports serve to inform the scarcity of property and determine the bargaining strength of seller. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_65&r=ure |
| By: | Gabriel M. Ahfeldt; Pantelis Koutroumpis; Tommaso Valletti |
| Abstract: | This paper shows that having access to a fast Internet connection is an important determinant of capitalization effects in property markets. We combine microdata on property prices in England between 1995 and 2010 with local availability of Internet broadband connections. Rich variation in Internet speed over space and time allows us to estimate the causal effect of broadband speed on property prices. We find a significantly positive effect, but diminishing returns to speed. Our results imply that an upgrade from narrowband to a high-speed first generation broadband connection (offering Internet speed up to 8 Mbit/s) could increase the price of an average property by as much as 2.8%. A further increase to a faster connection (offering speeds up to 24 Mbit/s) leads to an incremental price effect of an additional 1%. We decompose this effect by income and urbanization, finding considerable heterogeneity. These estimates are used to evaluate proposed plans to deliver fast broadband universally. We find that increasing speed and connecting unserved households passes a cost-benefit test in urban and some suburban areas, while the case for universal delivery in rural areas is not as strong. |
| Keywords: | Internet, property prices, capitalization, digital speed, universal access to broadband |
| JEL: | L1 H4 R2 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercdp:0161&r=ure |
| By: | Lekander, Jon |
| Abstract: | Several studies have analyzed the role of real estate in a multi asset portfolio, but little work has been done on how to formulate real estate strategies within the context of a multi asset portfolio. An unconstrained real estate strategy needs to take into account the impact of leverage as well as the impact of management fees. This paper explores how two different types of real estate assets, globally dependent office properties and locally dependent retail, residential and industrial can best be utilized over six investor domiciles, given different levels of leverage The results from the analysis indicates that leverage does have an impact on how real estate contributes to the overall portfolio efficiency, and that different types of real estate can be used for different objectives. It can also be concluded that real estate strategies composed of real estate with locally dependent tenant demand are generally preferable for diversification purposes over real estate with globally dependent demand, although not for all investor domiciles. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_14&r=ure |
| By: | Calá, Carla Daniela; Manjón Antolín, Miguel C.; Arauzo Carod, Josep Maria |
| Abstract: | We analyse the determinants of firm entry in developing countries using Argentina as an illustrative case. Our main finding is that although most of the regional determinants used in previous studies analysing developed countries are also relevant here, there is a need for additional explanatory variables that proxy for the specificities of developing economies (e.g., poverty, informal economy and idle capacity).We also find evidence of a core-periphery pattern in the spatial structure of entry that seems to be mostly driven by differences in agglomeration economies. Since regional policies aiming to attract new firms are largely based on evidence from developed countries, our results raise doubts about the usefulness of such policies when applied to developing economies. JEL classification: R12, R30, C33. Key words: Firm entry, Argentina, count data models. |
| Keywords: | Empreses -- Creació, Argentina -- Condicions econòmiques, Economia regional, Localització industrial, Països en vies de desenvolupament, Anàlisi de dades de panel, Sèries temporals -- Anàlisi, 332 - Economia regional i territorial. Economia del sòl i de la vivenda, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:urv:wpaper:2072/238220&r=ure |
| By: | Samsura, Datuk Ary; van der Krabben, Erwin |
| Abstract: | The Dutch national government has recently launched a national pilot program to test the effectiveness of urban land readjustment as a strategic tool for urban redevelopment projects. Urban land readjustment has been defined as the consolidation of adjoining plots 'by a government agency for their unified planning, servicing and subdivision with the sale of some of the new plots for cost recovery and the redistribution of other plots to the landowners' (Archer, 1989: 307; cited in Adams & Tiesdell, 2013: 274). Urban land readjustment – similar to the more common agricultural land readjustment, but now applied in an urban context - has been widely adopted both in European countries (but not in the Netherlands) and in Asian countries (Hong & Needham, 2007). In Van der Krabben & Needham (2008) we have argued the theoretical case for applying urban land readjustment in the Netherlands and elsewhere. Adams et al. (2001) have also proposed urban land readjustment for the UK, termed an 'urban partnership zone'.Urban land readjustment can be considered as a type of self governance, based on close cooperation between land and property owners in a certain area. In this paper we present the results of a simulation game regarding the negotiations that will take place between the land and property owners to decide for urban land readjustment. Game theoretical modeling is applied to test under which conditions land and property owners are willing to cooperate in an urban land readjustment project.ReferencesAdams, D., Disberry, A., Hutchinson, N. & Munjoma, T. (2001) Managing Urban Land: the case for urban partnership zones, Regional Studies, 35: 153-62.Adams, D. & Tiesdell, S. (2013) Shaping Places; Urban Planning, Design and Development. London: Routledge.Archer, R.W. (1989) Transferring the urban land pooling/readjustment technique to the developing countries of Asia, Third World Planning Review, 11: 307-31.Hong, Y. & Needham, B. (eds.) Analyzing Land Readjustment; Economics, Law and Collective Action. Cambridge, MA: Lincoln Institute of Land Policy.Van der Krabben, E. & Needham, B. (2008) Land readjustment for value capturing: a new planning tool for urban redevelopment, Town Planning Review, 79: 651-671. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_147&r=ure |
| By: | Zheng, Linzi; Wong, Kwok Chun |
| Abstract: | Selling public rented housing to its sitting tenants, a major method of housing privatization which become prosperous since 1980s, has been adopted by many different political systems and spread all over the world. However, outcomes of different programs are of large divergences, while the 'Right-to-Buy' policy in UK increases obviously homeownership level, other countries such as France, Netherlands and etc. did not achieve satisfied results; similar gap also happed in Asia like areas between Hong Kong and Mainland China. Hence the purpose of this paper is twofold: First, based on international data comparison analyses within wealth-maximization modes, to empirically identify major determinants out of both economic variables and demographic factors in tenure choice when facing the opportunity to buy their current living public rented houses and second a general pattern housing privatization proceeds for different countries can be drawn. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_18&r=ure |
| By: | Belniak, Stanislaw |
| Abstract: | The relatively small equity of mortgage banks that has been created in Poland for the past twelwe years does not allow refinancing of housing real estate credits with the use of mortgage bonds. Nonetheless, there is more and more imminent threat of liquidity problems amongst the universal banks that have granted mortgage loans for financing housing real estate. Thus, it is expected to see the emergence of a system of issuing bonds to improve financial standing of those banks. The process of development of mortgage banking raising funds on capital markets through the issue of bonds has been already commenced in Poland. The paper presents the essence and the legal groundwork for that process, as well as the volume and structure of bonds issue on the background of refinancing mortgage loans with bonds in the selected countries of the European Union. The paper includes a discussion of security principles, and presents the main issuers of bonds. Due to the attractiveness of that financial instrument the discussion includes a presentation of the bond market in Poland, and its main investors. In conclusion, the author presents prerequisites to encouraging and accelerating that type of financing which will also increase credibility of that security on the financial market. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_159&r=ure |
| By: | Solcia, Paola; Mosca, Daniela |
| Abstract: | The paper regards the relationship between a unitary process valorisation advantages and the increase in value of the properties analyzed (assets or territorial areas).The aim of a unitary project is to enable a synergical and coordinated approach among the different stakeholders (authorities, property owners, investors) involved in the process of redevelopment of the area, and the assets involved in the process. The success of a Model of territorial development is given by the minimization of risks related to the valorisation of real estate portfolio analyzed. Lower risks, reduce uncertainty of exit, easier disposal of assets leads to an increase in value.Some advantages of this approach: 1. the creation of synergies by exploiting the network structure of the Assets; 2. the activation of a process consistent with the broad urban and regional development;3. the ability to create offsets between different asset value to prevent disparities between properties with higher value and marginal; 4. the creation of real estate instruments in line with the vocation of the territory, with the strategic guidelines and with the real estate market conditions.The valuation model is based on a matrix that analyze factors, such as: the economics, the social context, asset quality, environmental and geological situation and others. The method will be implemented with the market, territory and stakeholders in order to contain any leakage of value and ensure successful initiative. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_95&r=ure |
| By: | Dempsey, Patrick; Squires, Graham |
| Abstract: | Foreign direct ownership of residential property in central London has accelerated over the past 10 years, with over 60% of new stock in 2011 being acquired by international buyers (Drivers Jonas Deloite, 2011). Prime residential prices in the top three boroughs rose by 49% from 2009 to 2012, which Knight Frank (2012) principally attributed to demand from overseas buyers. The market in parts of London has moved away from ties to the domestic economy, as the Institute of Public Policy Research notes that overseas demand is a potential force shifting London's housing market away from an anchor in local wages and the traditional boundaries of affordability (McCarvill et al, 2012). There is anecdotal evidence the new wave foreign owned properties have low occupancy levels and therefore do little to aid the housing shortage in central boroughs or support local businesses, leading to calls from Institute of Policy Research (McCarvill et al, 2012) and The Smith Institute (Haywood, 2012) for government intervention. There is limited publically available data on the utilisation of overseas owned prime residential in London, which is bridged in this research with quantitative data collated from surveys of all councillors in the three prime residential boroughs and qualitative data from interviews with professions engaged in residential development, sale and management. Findings consider the result of inward investment on prime residential values and the changes in economic activity in areas with the highest levels of foreign ownership. This research will be help to help inform policies on future inward investment.ReferencesDrivers Jonas Deloite. (2011). London Offices Crane Survey Heywood, A. (2012). London for Sale? The Smith InstituteMcCarvill,P. et al). (2012). Affordable Capital? Housing in London. IPPRKnight Frank. (2012). London Residential Review Autumn 2012. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_213&r=ure |
| By: | Schoenmaker, Dennis; Van der Vlist, Arno |
| Abstract: | This paper considers commercial real estate markets relative to credit cycles of expansion and contraction. In this paper we integrate insights from the credit literature with insights from the long-standing literature on rental price adjustments in the space market. Do rental prices determine real estate asset prices? What effect do bank loans have in real estate asset prices? These questions are central in this paper. We present a simultaneous equation model with fitted values to examine dynamics of asset prices, rental prices, capitalization rates, and credit availability. For this we use a unique dataset with office asset transaction and rental transaction prices from 1995-2010 for twenty-two cities in the Netherlands. These cities account for over 60 percent of the national office market. No previous European work has been able to address the interplay between the space market and asset market at such a comprehensive level of coverage. We investigate the time series properties by testing for unit root and co-integration of the series. Econometric analysis suggests that the asset price is significantly affected by the rent and credit availability whereas the capitalization rate is not significant. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_179&r=ure |
| By: | Thompson, Bob |
| Abstract: | Over the last twenty years, investment in European industrial property has been heavily influenced by logistics – in particular optimisation of the location of warehouses. As demand for consumer goods burgeoned, retailers began to exert more power in the whole supply chain to ensure the efficient flow of goods from manufacturer to consumer. The spatial implication of this was a shift from a pattern of warehousing determined by the production of goods to one determined by the pattern of consumption. The location of warehouses was optimised around the servicing of retail outlets.Investors and asset managers bought into this structural shift and, despite their specialist nature, logistics warehouses have become a key component in any multi-sector investment portfolio. From the perspective of value, the highest numbers are seen in so called logistics hotspots identified by the optimisation process.Across Europe the logistics process is dominated by road transport. However, fuel costs and the growing importance of the green agenda have forced logisticians to reappraise the transport modes used. Concurrently, investment in new infrastructure, particularly in eastern Europe, is redrawing the boundaries of what is possible. The optimisation of warehouse location is an ongoing process and one which has a direct impact upon value when hotspots move. This paper looks at the impact of the rise of portcentric warehousing upon the value of those port locations themselves but also upon the investment values seen in existing logistics hotspots.Initially the paper will set out the supply chain context to warehouse location identifying the main trade routes and points of entry.The paper will examine the different models for optimising logistics based upon different combinations of transport modes and examine their spatial impacts in terms of warehouse location. Having identified the current hotspots values will be quantified in each location. Overlaid on this picture will be optimisation based upon a portcentric model where warehousing is developed at or close to ports of import and export. The future impact upon values will be explored using different scenarios. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_7&r=ure |
| By: | Nie, Zhigang Albert; Wong, Kwok Chun |
| Abstract: | The two papers by Nie and Wong (2012a, 2012b) have explained the causes of the higher density and shorter life expectancies in China’s urban villages using a property rights based model. Meanwhile, in the paper by Nie and Wong (2012c), exceptional cases in Shajing, Shenzhen have been discussed, which shows that it is also possible that property rights can play a less decisive role for some occasions. Not only so, some patterns can hardly be explained conveniently using the existing literatures. Given the fact that the land law in China has not undergone any major changes in the past 20 years, in late 1990s and early 2000s, illegal construction by villagers themselves was basically “allowedâ€? at the time, but such construction is no longer allowed in recent years, except in Shajing, Shenzhen and some remote areas. This paper provides a general method defined by some rules, built upon the existing institutional theories but reorganized, to explain the different outcomes in urban villages. The rules mentioned, of course, can also be applicable for many other cases, which then will be illustrated further in an ongoing paper following this (Nie and Wong, 2013).ReferencesNie, Z and Wong, K.C. (2012a). Why build more to earn less: property right implications of urban villages. International Journal of Construction Management, 12(4), 65-82Nie, Z and Wong, K.C. (2012b). Why do urban villages have shorter life expectancies? Observations in three Chinese cities and economic explanations. Working paperNie, Z and Wong, K.C. (2012c). Estates with “smallâ€? property rights in Shajing, Shenzhen. Working paperNie, Z and Wong, K.C. (2013). Transaction cost, non-productive cost, securable income, and economic outcomes: a general analysis. Working paper |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_168&r=ure |
| By: | Wu, Wen-Chieh |
| Abstract: | The public land leasing has been increasingly used as the instrument of generating revenues for local governments as well as the tool of regional competition for manufacturing investment. The local government can generate two revenue streams from leasing public land: land conveyance fees and future formal tax revenues. These formal taxes include value-added tax (VAT) from enterprises, business tax from services, and income tax from profits. In order to raise sustainable tax revenues from manufacturing capital in the future, the local government usually sacrifices conveyance fees and reduces the public land leasing price through one-on-one negotiation. Using the provincial-level data, this paper empirically examines the impacts of public land leasing on the lagged revenues from major local taxes. Our dependent variable is either total fiscal revenue or specific tax revenue. The candidate variables of public land leasing include the number of land sites leased, the total area of land sites leased, the leasing revenues, and the leasing price. The empirical analysis provides the evidence that the public land leasing has a clear effect on the future revenues from both VAT and enterprise income tax. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_24&r=ure |
| By: | Saxinger, Andreas |
| Abstract: | During the last few years a new phenomenon arose in some cities in Germany. Especially in Eastern Germany and in economically undeveloped regions a significant number of houses are in poor condition. House owners are not able or not willing to maintain their buildings. Neglected buildings may have a negative impact on the attraction of the surroundings, but also may represent a danger for the public security.Efficient legal activities against the house owners are difficult for the authorities. Building law is in the legislative competence of the German Länder. Usually the range of legal activities is focussed on illegally erected buildings, but many neglected buildings were erected legally. Some Länder decided to add a new regulation to the building law, which permits the authorities to demolish neglected buildings even against the home owner's will. It is only necessary, that a building is not in use any more, is in dilapidation und there is no public interest in the conservation of the subject building. The question, if the neglected building has been legally erected, is not a condition of the new regulation. German planning law, which is in the legislative competence of the German Federation, was for a long period only applicable to whole quarters or entire streets of neglected buildings. Without a plan of the municipality, measures were not possible. In 2012 the Federation changed the planning law to make it better applicable also to single neglected buildings. Now a demolition order is allowed for the municipality even when there is no local statute for the quarter. On the contrary an expropriation of neglected buildings needs a local statute for the quarter far off. In the next years it remains to be seen, if the new federal planning law will solve the problems of the municipalities with neglected buildings. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_118&r=ure |
| By: | Leussink, Marieke; Smeets, Jos J.A.M. |
| Abstract: | The Housing costs of households are diverse. Especially the costs of single households are often high. Single households occur in any stage of the life cycle, among starters, divorced couples, widows or widowers. For some of them the costs pass 40% of their income and this percentage will increase in the near future. As a single wage earning household they often consume a lot of dwelling space. As a consequence of this the total housing costs are high. If this situation remains unchanged, in the future some of them can hardly afford their housing costs.The situation is even more urgent because the amount of single households in the Netherlands is increasing substantially the coming decades. This paper is based on an extensive survey on housing costs among households in the region of Eindhoven. The question 'Are housing costs of singles high as a consequence of the overconsumption of dwelling services or as a consequence of the constraints on the housing market?' comes up.After exploring the problem of housing cost for different single households in different housing situations (tenure, building period, energy performance of the dwelling, dwelling type, etc.) suggestions are made to control or reduce their housing costs in the short and long term. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_138&r=ure |
| By: | Boshoff, Douw Gert Brand |
| Abstract: | Various literature explains the relationship between consumer behavior on property, with specific reference to housing, and the expected wealth effects associated with property investment. This is also shown to affect other consumption expenditure. Real estate is also shown to be the largest single investment of households, with specific reference to housing expenditure. It is expected that this also holds truth for commercial property, with real estate being a critical part of the production process, from manufacturing and corporate services up to marketing and sales. Due to the magnitude of property in the economy, and with the level of labour associated with the production (construction) thereof, it is expected that income level disparity largely influences the cost of property and that the same level of disparity could be seen in property itself. But with the associated wealth effects, the influence of property on other consumption by households, or production by firms, would be different for markets with different levels of income disparity. This study investigates the relationship between property consumption behavior and the equilibrium level with other consumption, differentiated by levels of income disparity. In order to investigate this, a property purchase power parity (PPPP) index will be created, whereby a residential PPPP index will be evaluated against different economic variables in household expenditure patterns, and the commercial PPPP index will be evaluated against the differences in input/output tables for the production sectors in the economy. The equilibrium expenditure level, as well as the production input/output equilibrium, is expected to be related to the property purchase power parity in any country. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_341&r=ure |
| By: | Staube, Tatjana; Geipele, Ineta |
| Abstract: | The purpose of the Article is to introduce the worked out model on the Latvian industrial real estate market development forecasting for the professional auditorium. The originality/value of the Paper is that the proposed model anticipates the high quality (A class) industrial property stock and the manufacturing branch potential capacity applying the projections of the European climate change data. The research is supplemented with the results from the industrial regional specialization analysis recently made for the Baltics. The main findings are that the model predicts the manufacturing value added dynamics planned in the Latvian National Program until 2020 conforming the impetuous development scenario that is too ambitious at the current industrial market development stage of an extremely low regional specialisation level in Latvia. Although the weighted average scenario's projected manufacturing capacity of 1.01 compound average annual growth rate corresponds to 1.72 times larger A class industrial property stock in 2020 in Latvia that expects the sufficient capital inflows and increase of the multinational enterprises business activity. The use of the ENSEMBLES project's complex data results, logical approach and comparisons, the system and dynamic row's analyses, calculations of the Gini coefficient on regional specialization supported by the empirical evidence on the scientific and business literature review is a complex of the methods applied in the research. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_156&r=ure |
| By: | Haddad, Emilio |
| Abstract: | The practice of Real Estate in Brazil has gone to several changes in recent past that have resulted in an enormous development of the industry. It has implied in increasing demand for manpower training and development a local knowledge of this emerging field. Because of a virtual lack of a “Real Estate school� in Brazil, Real Estate has been approached by different educational traditions, such as construction planning and management, Real Estate business, Real Estate finance. The purpose of this communication is to present the case of MBA in Real Estate development, an educational program that seeks a more comprehensive view of Real Estate Development in Brazil, stresses the need of Real Estate interplay with regulatory city planning, and seeks also more balance between theoretic and applied teaching. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_354&r=ure |
| By: | Chou, Mei-Ling |
| Abstract: | This study used the 2000Q1 to 2010Q3 panel data of Taipei City, New Taipei City, and the Tao-Chu area in Taiwan to examine the stationary of the turnover ratio and the lead-lag relation of the turnover ratio and housing price. The fixed effect models showed that the turnover ratio can explain the 12.81 % of the next period price variance, and the model with lower AIC and SBC value than price-volume model. This signifies that the turnover ratio and price model are superior fits for the panel data. The results of the Fisher cointegration test showed that more than one cointegration relation exists in the proposed models. The results of the Granger causality test showed that a strong interaction exists between Taipei City and New Taipei City, which the (t-1) period turnover ratio led the t period price variance. But only the price variance in New Taipei City increased in conjunction with the price variance in the Tao-Chu area. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_286&r=ure |
| By: | Carvalho, João-Manuel |
| Abstract: | Urban rehabilitation is a public concern in an epoch of very scarce public means. Partnering with private real estate development (RED), reducing or eliminating public investment and maximizing positive externalities, is a must for urban authorities. How can RED fit this rationale with good private business outcomes? Speculative RED normally targets the average end-user of the market range it addresses. This goes against the variability and the specificity that RED in urban rehabilitation commonly imposes and which brings with it accrued risk, requiring a very detailed business approach that has to be combined with the management of the legal contexts on the public side.The present importance of urban rehabilitation for the RED business derives mostly from reduced business margins elsewhere, either because sustainability makes land development very expensive or impossible, or because new lifestyles reduced willingness to pay for peripheral locations. Tourism development, which is an important business domain for RED in Portugal, has met its ceiling as far as end-user purchase demand is concerned. Urban rehabilitation is therefore a privileged business area for both RED and urban authorities, where state of the art RED resides.Finding out what are the components of a RED detailed approach to urban rehabilitation and its relationship with the urban authorities is the aim of the paper, through a much talked about case study in Lisbon. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_33&r=ure |
| By: | Hullgren, Maria; Söderberg, Inga-Lill |
| Abstract: | The purpose of this paper is to investigate consumer characteristics that influence Swedish consumers' mortgage rate decisions, such as the choice between an adjustable rate mortgage (ARM) and a fixed rate mortgage (FRM). Data were collected in a randomised survey of the Swedish population in 2012. Through binary logistic regression, the effects of loan-to-value (LTV), age, education, income and risk aversion on household mortgage decisions are investigated. In addition, consumers' ability to handle sudden mortgage rate increases are examined together with five attitudinal questions on factors influencing the mortgage decision.The results show that higher LTV, a lower level of education, higher age, lower income, high risk averseness influence Swedish consumers to choose FRMs, while having trouble handling interest rate increases promotes the choice of ARMs. Four of the five attitudinal statements that was tested non-directional did make a statistically significant contribution to the model.This paper tests a number of characteristics in predicting consumers' mortgage choices, emphasises the importance of loan takers' ability to cope with sudden mortgage rate increases, highlights the importance of attitudes in understanding consumers' financial choices and elucidates the Swedish case. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_283&r=ure |
| By: | Yeh, Kuang-Yih; Hsia, Hao-Ching |
| Abstract: | The dramatic growing of private vehicles ownership results in heavy traffic congestion and serious environmental pollution in the city, such as air pollution and annoying noise. Professional urban planning experts have attempted to achieve the target mentioned above by adjusting current land use. However, adjusting land use always takes a long time. At the moment, the advanced countries in Europe and the United States have been already paying attention to traffic demand management (TDM) in order to solve these environmental problems and achieve the target of building a sustainable living environment. While road pricing (RP) is generally regarded as one of the most effective measures of TDM, its poor acceptability has been the greatest impediment to its implementation. Japanese scholars proposed the parking deposit system (PDS) as an alternative RP scheme to improve the public acceptance. In view of the above, this study takes a local commercial district of Tainan City as the study area where the data of visitors driving private vehicle are collected by a stated preference questionnaire. Because the acceptances of two policies are considered to be correlated in this study, the choice behavior model of acceptance is established by using bivariate binary probit model. This study also considered that different groups may hold different attitudes, so respondents were separated into two groups according to their consciousness of fairness. Therefore, the choice behavior model of acceptance of fair group and unfair group are built and compared. The result of model estimation has several good implications for the proposal of environmental policy and traffic demand management measures. It indicates that the most important thing that people really care about is cost. That means individual’s behavior can be adjusted by charge schemes. On the other hand, the result of social interaction equilibrium shows that the difference can be obviously distinguished from different groups, so it is recognized that the approval probability of the fair group is higher than the unfair group. The marginal effects of estimated coefficients are also discussed in this study. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_192&r=ure |
| By: | Nie, Zhigang Albert; Wong, Kwok Chun |
| Abstract: | It has been identified in Nie and Wong (2012) that substantial rental value losses can be induced by excessive land exploitation in urban villages in the mainland of China. It has also been suggested that incomplete and unclearly delineated property rights, transaction cost, and consequently the absence of effective building regulations have played an important role leading to such tragic results. Through a comparison of 96 pairs of cases collected from three major Chinese cities (Shenzhen, Guangzhou, and Xi'an), it has been found that compare to non-village estates, an average of 72% of urban villages have been overbuilt, which leads to a problem of 'more construction but less rental values'. The overdevelopment problem can be viewed as, according to institution theories, a production change (a distortion of resource combination), given the constraint of defective institutional environment. It is natural then a different timing of contract change may follow, since certain conditions for renewal projects can be met differently. Throughout the lifetime of a building community, natural rent dissipation happens due to outdated design, changing market condition, or simply building aging. As a result, a building community has an economic life (a type of economic selection), which may be shorter than its physical life. An empirical test conducted in this study on 16 demolished non-village estates in Shenzhen, 14 in Guangzhou, and 10 in Xi'an in the recent years shows that the average economic lifetimes for non-village residential estates in the three cities are respectively 19.8, 22.5, and 28.9 years. However, urban villages have shortened life expectancies. An empirical study of 1054 online samples in Shenzhen, 138 samples in Guangzhou, and 134 sample in Xi'an shows a paradox that the average building ages in urban villages in the above three cities are quite new, respectively only 12.1, 12.2, and 13.8 years, but many such villages are already demolished or planned for demolition soon. The data for non-village buildings were collected through a scan of the official renewal documents on the governments' websites. The data for urban villages were collected online from real estate websites, on which landlords post their 'for rent' information. Such a paradox can be explained in connection to the previous pattern identified in Nie and Wong (2012), that in comparison to non-village estates, urban villages suffer a problem of more severe rent dissipation induced by defective initial institutional settings. The problem can make the critical condition for renewal due earlier, thereby shortening the life expectancies for urban villages. Besides, the income transfer effect caused by the state-villager interaction and the possible cost difference for negotiation can also bring forward renewal schedules. The combination of the three reasons then leads to earlier renewals. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_136&r=ure |
| By: | Chen, Fong-Yao; Peng, I-Wei; Liang, Jen-Hsu |
| Abstract: | Purpose - Global environment has worsened since the 20th century, hence the development and research of green building has become a global concern. The literatures have found that green building will increase its property value. Green building has been developed over a period of time in Taiwan. However, the relationship between green building and property price is not significant. This study aims to test the actual 'green' premium on property price and explore the reasons why it was slowly promoted in Taiwan.Design/methodology/approach - This study is based on the Hedonic price model to estimate the price premium of green building in Taiwan by adopting a least squares regression model. Firstly, we get the variables of green building characteristics by literatures reviewing, questionnaire and interview. We then analyze the effects of 'green building'.Findings - We found that the number of green building, EEWH (Ecology, Energy Saving, Waste Reduction, Health) in Taiwan, increased slowly. Consumers recognize green is helpful to health and the earth. However, it is less price premium. The developers have less incentive to build EEWH building beside renewal project and luxury house. The 'Floor Area Ratio Incentive Policy' should be expanded to general housing. Originality/value - The achievements help to analyze the effect of green building on property value much more, and improves the green knowledge to community. It will also make the developers realize which indicator of 'green' affects property value more. As for the government, it can support the improvement on green policy, and promote more prosperous green building in Taiwan. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_101&r=ure |
| By: | Chen, Shu-Mei; Yang, I-Chuan |
| Abstract: | The elderly suffered the uncertainty of health, losing spouse or wealth accumulation as they aged. In aging and low fertility society, how to increase elderly financial resources and satisfy their needs for everyday lives so that they can age with dignity is a very important issue. The homeownership rate is almost 85% or more in Taiwan. Some elderly households are housing rich but cash poor, the housing wealth could be converted to the living expense if they want. This study would like to explore the relationships between the housing tenure decisions after moving and economic status for the elderly. Both the economic financial needs and bequest behavior would have impacts on the housing decisions for the elderly. This study employs the multinomial choice models and the Survey of Health and Living Status of the Middle Aged and Elderly in Taiwan. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_288&r=ure |
| By: | Appel-Meulenbroek, Rianne; de Vries, Bauke; Weggeman, Mathieu |
| Abstract: | Purpose - In present day society, focused on innovation, knowledge sharing (KS) is essential. CREM needs to provide accommodation designed for people to meet more often and share both tacit and explicit knowledge. Most workplace descriptions do not provide quantitative information on how the design actually stimulates KS. They cannot be implemented straight into a design nor convince general management in budget discussions. This paper tests the suitability of spatial network methodologies to provide this proof.Design/methodology/approach - After developing a conceptual model from literature, the model is tested with a case-study of one large research driven organisation in the Netherlands. For each possible dyad between 138 employees (= 9453 dyads), several KS indicators and workplace aspects are studied with statistical analyses.Findings - KS is clearly related to the allocation of people to the rooms and workplaces in a research building. Bumping into each other does not appear the reason for this relation. Up to distances of 22 meters dyads share average or higher amounts of knowledge. It is ambiguous whether the spatial network analysis methodology is relevant for measuring added value of the workplace for KS. Originality/value - This paper provides empirical evidence on a 'softer' added value of the workplace, which is scarce. Previous studies relied mainly on qualitative descriptions of the workplace, while this paper tests a methodology to quantify the workplace in measurable aspects and correlate them statistically to organisational outcome measures. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_37&r=ure |
| By: | Brad R. Humphreys (West Virginia University, College of Business and Economics); Li Zhou (University of Alberta) |
| Abstract: | Professional sports teams receive large public subsidies for new facility construction. Empirical research suggests that these subsidies cannot be justified by tangible or intangible economic benefits. We develop a model of bargaining between local governments and teams over subsidies that includes league expansion decisions. The model features loss aversion by fans that captures lost utility when a team leaves a city. The model predicts that teams exploit this loss aversion to extract larger than expected subsidies from local governments, providing an explanation for these large subsidies and highlighting the importance of anti-trust exemptions in enhancing teams' bargaining positions. |
| Keywords: | Endowment Effect, Loss aversion, major league sports, bargaining |
| JEL: | D42 H25 L12 L83 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:wvu:wpaper:14-17&r=ure |
| By: | Akimov, Alexey; Lee, Chyi Lin; Stevenson, Simon |
| Abstract: | A large number of studies have previously examined the effect of interest rate changes on the securitised real estate market. However, the majority have focused on aggregate index level data. Few studies have been undertaken on micro-level data. These lead to a question of whether previous findings can be generalised to individual firms. This study considers the impact of interest rate changes on European listed real estate companies. Using data since 1990 we examine both the aggregate index level sensitivity of European public real estate and also consider the micro-level firm specific sensitivity. Specifically, the study examines the following questions:1: Do interest rate changes have a significant impact on European real estate stocks? 2: Do real estate stocks in different markets behave differently in terms of their interest rate sensitivities?3: Do firm characteristics affect the interest rate sensitivity of real estate stocks?4: Has the interest rate sensitivity of real estate stocks changed pre, during and post financial crisis and quantitative easing ?By answering these questions, this study will offer contributions to the following areas. First, we extend the limited studies on interest rate sensitivity to European real estate markets, particularly emerging European property markets. Second, this study is the first to explicitly examine the linkages between real estate firm characteristics and interest rate sensitivity based on an international large sample. Thirdly, this is one of the first pieces of research to examine the impact of the financial crisis and quantitative easing on the interest rate sensitivity of listed real estate vehicles. The volatility of interest rates in Europe since the GFC means that a fuller understanding of interest rate sensitivity of real estate stocks over different market conditions is of importance for investors’ decision-making. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_77&r=ure |
| By: | D'Arcy, Éamonn |
| Abstract: | The built environment of any city inevitable exhibits path dependencies and maps imperfectly onto its current accommodation requirements. In turn this impacts on the city’s territorial competitiveness and its capacity to retain and attract the key sectors most likely to drive its economy. In an era of global competition the ability to reposition the urban built environment becomes an even more important concern for those tasked with retaining and enhancing urban competitive advantages. This paper explores these arguments through a case study of the repositioning of London’s built environment in the first two decades of the 21st Century. This repositioning has taken place in a largely uncoordinated way through a combination of area wide regeneration schemes, major infrastructure investments, a desire for tall buildings, the ability to attract global real estate capital flows and the hosting of a major global sporting event. The analysis attempts to rank the relative importance of these factors and examines the extent to which London provides a template for other cites attempting a similar repositioning of their built environment with the view to enhancing urban competitiveness. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_201&r=ure |
| By: | Nozeman, Ed; Van der Vlist, Arno |
| Abstract: | Global cities at the very top share the highest level of well-being in economic, social and cultural perspective. Connectivity thereby seems to pay off in both booms and busts, as commercial real estate market reports indicate. We analyse returns across global markets relating market dynamics to both global and local drivers. Previous literature suggests that return rates differ widely across global markets, substantiating the view that returns are intertwined with conditions at the local level. Whether and to what degree differences in these global markets relate to differences in local institutions has not been addressed. This is the central issue of this paper, thereby extending earlier presented results on European metropolitan commercial real estate markets with findings for Asia, Australia and the Americas.The research design consists of three coherent steps to address the central issue. Step 1 addresses the issue of how institutions may determine differences in office market dynamics.. We use current contributions in the literature, culminating in a concise review of the literature on institutions and office market behaviour. Step 2 aims to measure the degree of differences in office market returns. For this we use data across metropolitan areas. Step 3 considers the interrelations between office market dynamics and institutions to explain the observed differences in step 2. For this we model market returns now including the various institutional measures identified in step 1. These results will indicate which and to what degree the various institutional measures explain observed differences in local office dynamics. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_268&r=ure |
| By: | Keuschnigg, Marc; Wolbring, Tobias |
| Abstract: | Adding to the debate about the “broken windows” thesis we discuss an explanation of minor norm violation based on the assumption that individuals infer expected sanctioning probabilities from contextual cues. We modify the classical framework of rational crime by signals of disorder, local social control, and their interaction. Testing our implications we present results from three field experiments showing that violations of norms, which prevent physical as well as social disorder, foster further violations of the same and of different norms. Varying the net gains from deviance it shows that disorder effects are limited to low cost situations. Moreover, we provide suggestive evidence that disorder effects are significantly stronger in neighborhoods with high social capital. |
| Keywords: | broken windows theory; disorder; field experiment; low cost situations; norm violation; social capital |
| JEL: | C9 C93 K42 R23 Z13 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:57534&r=ure |
| By: | Wellner, Kristin; Landau, Friederike |
| Abstract: | Real estate markets are influenced by diverse factors from both the supply and demand side. One influential dimension of real estate developments is tourism. On the one hand, the rising attractiveness of a city or region leads to changing configurations in the services and retail industry in order to consider tourists’ consumption and leisure practices. On the other hand, the real estate market is affected by an influx of tourists, aiming at accommodating the various needs of tourists. Berlin, which has remarkably risen as tourist destination in the past years, now ranking third after Paris and London in Europe, is affected by tourism in various ways: the hotel and catering industry is expanding, especially in the low budget travelling sector (hostels etc.), sometimes rivalling previous usages of the city space. With an estimated number of over 12,000 vacation rentals, many Berlin tourists stay in apartments, which were formerly regular apartments on the rental market. This practice of ‘authentic living’ creates more scarcity of affordable rent space in the city. The present paper discusses the concept of ‘touristification’, partially seen as side effect of gentrification, and its influences on the development of rent prices, modernization efforts and tenant structures. We are investigating the short- and long-term implications for both property owners, looking at higher short-term gains by renting to tourists, and tenants’ perspectives, facing higher pressure on their rents.To this point, the concept of ‘touristification’ has not received much scholarly analysis. Being present in popular discourse in Berlin’s city-specific political debates, the term is commonly used, however weakly defined. With the present research, we seek to conceptualize what phenomena the term ‘touristification’ seeks to describe and in what ways ‘touristification’ has an impact on real estate prices, on the housing market for property owners, as well as national and international tenants. In the present paper, we will delineate research questions and preliminary hypotheses on this very current topic. Applying a mixed-methods approach of real estate know-how and social sciences methodologies, we will present our interdisciplinary research design. We will give insight into the study design, which brings together perspectives on the (perceived and physical) influences of tourism on Berlin neighbourhoods from property owners, tenants and tourists. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_203&r=ure |
| By: | Gluszak, Michal; Marona, Bartlomiej |
| Abstract: | In order to provide a sufficient level of public services, a municipality - as a basic unit of local government in Poland - must be supplied with an adequate level of regular revenues. In a long run the level should rise proportionally to the development of the region. The main purpose of this article is to describe a role of recurrent taxes on immovable property in local government revenues in Poland. In the first part of the paper, we address the problem from international perspective, and examine revenues from recurrent taxes on immovable property in OECD countries. In the second part of the paper, we:(i) explore differences in property tax policy at local level, (ii) analyze similarities between local municipality in Poland with the use of cluster analysis,(iii) analyze relations between tax policy and tax revenues. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_107&r=ure |
| By: | Livingstone, Nicola |
| Abstract: | The urban retail environment actively reflects changes in society today, as we exist in an undeniably interconnected world. Such movements have produced a geographically uneven market through which charity retailing has evolved. Charity retailers have become ubiquitous in their presence on the British high street – it is more surprising to discover urban areas without these retailers. Society has created the need for such retailers, but since their expansion in post World War Two Britain they have undergone a significant transformation – both economically and spatially. Charity retailers have become professional, profit maximising businesses as they developed from a stigmatised second-hand retailer relegated to undesirable retail locations have now emerged as fashionable signifiers of gentrification. This research considers the growth of charity retailers from an economic and spatial perspective, adopting the city of Edinburgh as its case study. Charity retailing is situated within the urban economy of the early twenty-first century, as a niche, which has evolved concomitant to the restructuring of the retail market. The paper addresses the lacuna of research in the third sector relative to charity retailers and is informed by socio-economic data and ethnographic studies. The research seeks to answer the question: How have charity retailers become so indelible in the British high street and how can they be understood? |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_253&r=ure |
| By: | Arslanli, Kerem Yavuz |
| Abstract: | After 2002 economic restructuring encouraged the growth in Turkey. Between the years 2002 and 2006, Turkish economy has grown by 7.5%. Consequently, private consumption expenditure have increased by 8% annually, by 6% per capita and private sector investments in fixed assets have increased by 23%. In parallel, the housing and commercial real estate sectors have also demonstrated a considerable growth. Foreign capital investments and the shares of international investors in commercial real estates have also increased. In this paper multi-centre development of Istanbul is investigated with respect to Office, Retail and Residential markets. The Central Business District of Istanbul begins with the Barbaros Boulevard, continues along the Büyükdere Avenue and reaches to Maslak. The high-rise plaza type offices on the Esentepe-Zincirlikuyu-Levent-Maslak direction have contributed to the development of this central business district. This paper investigates and models the possible outcomes of additional 3 million population among districts of Istanbul as the local planning authority predicts. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_186&r=ure |
| By: | Macgregor, Bryan D.; Giannotti, Claudio; Mattarocci, Gianluca; Roberti, Simone |
| Abstract: | The hedonic price models on the office sector demonstrate the existence of a link between the rent and the vacancy of the area (Wheaton and Torto, 1988), the characteristics of the building (Clapp 1980) and the characteristics of the area (Gardiner and Henneberry, 1988). The role of each feature and the significance of the hedonic price models depends on the characteristics of the market analyzed (Atilla and Pekdemir, 2006).The theoretical and empirical models suggest that the interaction between demand and supply could impact on the rent price and the final rent will be defined on the basis of a negotiation process (Tsolacos, Keogh, McGough, 1998). Empirical evidence on the role of tenant features in explaining a misalignment respect to a fair rent defined on the basis of the property and area features is still limited.Using a proprietary database, representative of Milan, on the time horizon 2000-2011, provided by BNP Paribas Real Estate, we collect all information about all tenants' features (balance sheet data) for a set of 800 contracts and the information about the property and the rent. We compute the difference between the real rent and the expected rent defined on the basis of the hedonic price model constructed on the buildings features and the geographical area and we study the role of tenant features in explaining the gap measure. The results provide some interesting evidence on the role of tenant features that could explain the divergence of the rent respect to its expected value. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_228&r=ure |
| By: | Trofer, Birgit; Seeberger, Bernd |
| Abstract: | Purpose - Given age-related dwindling of competencies and eventual necessity of home-based nursing care in the home of elderly people, this study shows the spatial and social implications with reference to the person-environment fit. Design/methodology/approach - A qualitative approach has been chosen in order to conduct a penetrative single case analysis whose multiplicity permits a socially realistic description of the specific research context. Eleven members of staff from six different care organisations based in Austria were asked about these circumstances within the framework of expert interviews, supported by interview guidelines and recorded with an electronic device. The transcribed interviews were analysed using Qualitative Content Analysis according to Mayring (2008).Findings - The results emphasise the special significance of the person-environment fit for the context of home-based nursing care for the elderly and the particular demands made on their homes. Facing decreased personal competencies, especially missing barrier-free elements in the dwelling have been criticised. The recommendation of home adaption measures, improvisation and the refusal of the assignment of home-based care belong to the strategies the research group undergoes. Furthermore, the results show an enhancement of the person-environment fit. Besides proving room for living, the dwelling has to fulfil further functions because it is now the epicentre for the provision of home-based care. The results illustrate that attention should be directed on the private and individual context of the person.Originality/value - The study at hand, building on existing research results, adds the perspective of health care workers with regard to home-based care of the elderly. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_201&r=ure |
| By: | Laré, Amandine Loyal; Choumert, Johanna; Kere, Eric |
| Abstract: | The international community has made a commitment that aims to halve, by 2015, the number of people without access to safe drinking water and hygienic sanitation systems. In Togo, the government struggles to provide the population with access to water and sanitation, despite a proactive policy. We argue that a connection to safe water and sanitation increases housing values. Using collected data from the city of Dapaong, we develop a hedonic price model to capture the relationship between housing values and their characteristics. Our results support the need to accompany any investment in access to water and sanitation with real estate policies, so that the poorest households remain beneficiaries of the pro-poor policies. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_10&r=ure |
| By: | Liang, Jen-Hsu; Chen, Fong-Yao |
| Abstract: | Purpose - The prices of old apartments in Taipei have reached record highs, with the market exhibiting a 'the older the building, the higher the price' inverse depreciation phenomenon. Because that real estate value includes not only use value, but also contains redevelopment value. This study examines the redevelopment value affected by redevelopment potential and by intensity of use and regional price levels of real estate parcels.Design/methodology/approach - This study is based on the hedonic price model and adopts a semi-logarithmic regression model to explore the depreciation effect.Findings - The results of this study showed that old buildings in Taipei do exhibit increasing value and thus inverse depreciation. The effect of building age on redevelopment value is that, the higher the expandable floor area ratio, the more intense is the inverse depreciation effect. Moreover, the higher regional price levels are, the more intense the age effect is. The combination of these two factors will have an intensifying effect on inverse depreciation.Originality/value - This study separated redevelopment value from real estate price, adopting a direct approach to explore the building age effect in redevelopment value, not only to avoid possible bias due to confusion inherent in the indirect analysis used in previous studies, but also to further clarify the role of redevelopment value in real estate value. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_104&r=ure |
| By: | Liu, Yan; Chau, Kwong Wing |
| Abstract: | Hong Kong is regarded as one of the most fantastic shopping paradise for tourists. Retailing is a major economic activity here and highly correlated with tourism industry. Implementation of Individual Visit Scheme (IVS) policy since July, 2003 which allows Mainland China citizens to visit Hong Kong on an individual base has significantly increased proportion of tourist shoppers and affects greatly on retail property. Based on 635 transaction record of the street-level retail shops between 1991 and 2011 in Hong Kong, and with the use of hedonic price model, this study examines hedonic attributes that affect this specific retail property type and also makes use of the IVS event to analyze and evaluate the changes in the implicit prices of certain attributes. The empirical study shows positive correlation between increase of tourist shopper and retail property price, and strongly supports our hypothesis. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_22&r=ure |
| By: | Robson, Kathryn |
| Abstract: | Purpose - This research provides an analysis of the disparate notions and ideas, to form an overview of the possible trends in residential property for the Victorian coastal areas of the Surf Coast and the Bellarine Peninsula. Design/methodology: Whilst examining the patterns of urban development in these areas of coastal Victoria over the last 20 years, the research also investigates possible reasons for the changes that have occurred. The data used in this research comes from both primary and secondary sources. The primary data was developed on the basis of responses to a mail out questionnaire to residents from seven towns on the Bellarine Peninsula and the Surf Coast. The secondary data comes primarily from the Australian census results, which occurs every five years, the most recent being in 2011.Findings - These coastal communities and their environment are at serious risk from the increased growth of both population and tourism. It is only with the support of all three tiers of government that the future requirements of coastal communities will be met. Social implications - There needs to be a policy framework of sustainable growth and a funding approach to enable the local councils, not only on the Bellarine Peninsula and the Surf Coast, but on all Australian coastal areas, to embark on an extensive program to provide the necessary services and infrastructure for these changing environments.Originality - This research brings into question the need to control residential development to protect the fragile environment in the Australian coastal areas. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_55&r=ure |
| By: | Zheng, Chen; Marcato, Gianluca; Milcheva, Stanimira |
| Abstract: | This paper examines the empirical impact of trade openness on the short-run underpricing of real estate IPOs in China, on a city level. To our knowledge, this represents the first paper which employs a macroeconomic argument to explain the real estate IPO performance. Our work is based on the Balassa-Samuelson (1964) effect, which suggests a significant impact of trade openness on both direct and indirect real estate markets. Moreover, trade openness was found to increase the firms’ future profitability providing more business opportunities._Since Chinese real estate companies have strong geographic patterns with business focus in a local district – usually at city level – and the extent of openness is significantly heterogeneous, this specific market represents a useful laboratory to examine the macroeconomic effect of trade openness on the real estate IPO underpricing in urban level. The model is estimated using a dataset of primary information on real estate IPOs in China from 1992 until the end of 2013. By using the de facto measure of the trade openness and controlling for other economic and firm-specific variables, we find evidence that the trade openness of a city has a significantly negative impact on the IPO initial return. We explain this result arguing that trade openness increases the issuer and its underwriters’ confidence in the firm’s future performance and hence issuers and underwriters do not need to underprice the shares to guarantee the success of an IPO._ |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_98&r=ure |
| By: | Sliczna, Malgorzata G. |
| Abstract: | The policy of European Union is focused mostly on green growth, therefore there is an increasing number of regulations concerning sustainable development. The situation is the same in the matter of life cycle of buildings, where pressure is put on eco-friendly solutions. The purpose of the paper is to describe the green residential real estate market in Wroclaw's county and to characterize its main attributes.The paper closely examines put to use, 'green' residential properties. The research studies statistical and real estate data from government agencies, such as District Inspector of Building Control for Wroclaw's county and Cadastre office of Wroclaw's county. The information gathered allows marking out energy efficient residential buildings and determining their value. The research shows that 'green' residential buildings have just a small share in the real estate market of new buildings. The result of the study indicates that just a few of those buildings were sold by the end of the year 2012. Furthermore almost all of 'green' houses were constructed by their owners. An interest in energy efficiency can be the result of the increased willingness to reduce the operating costs of the property. By analyzing the information gathered, the most popular eco-friendly solutions used in buildings (such as: solar panels, heat pumps, biomass boilers) were identified. The research estimates the actual value of 'green' buildings. One of the research limitations was the quality of Energy Performance Certificates (EPC). Even if the EPC was done according to the national approach it may give misleading information about energy efficiency of the building. In the future a further research on the effectiveness and correctness of EPC is necessary. The paper is unique in the field of real estate in Poland as it concentrates on the residential real estate in regards to sustainable development. The results of the research can be useful to valuers and investors since it gives genuine data on the green residential buildings market in Wroclaw's county. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_86&r=ure |
| By: | Huston, Simon; Jadevicius, Arvydas; Minaei, Negin |
| Abstract: | The relationship between talent and economic growth is well established but whether jobs pull in talent or talent incubates start-ups is less certain. Here, we assume talent drives growth. In the UK, demographics and educational deficiencies dictate that much talent will continue to be foreign. We focus on foreign post-graduate students as a rich potential source of talent. Overseas students are sensitive to a number of factors (high tuition fees, immigration policy, and discrimination) but, here, we examine the responsiveness of the UK private rental system In the UK, housing shortages drive up rent and, in tight rental markets, letting agent professional standards can slip. So the broad question emerges: does the private rental system nurture talent? Specifically, how responsive is it to the needs of post-graduate students? For an answer, we turn to the literature, analyse secondary data, investigate rental agencies and conduct some local student interviews. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_56&r=ure |
| By: | Breuer, Wolfgang; Schaeling, Dominique |
| Abstract: | Urban areas are nowadays seen as the engines of economic growth and thus politicians rivet on problems connected to urban development. Most importantly, the question of how projects, which enhance urban life should be funded raised concern. The European Commission reacted to this topic by the introduction of the JESSICA (Joint European Support for Sustainable Investment in City Areas) Initiative. Within this initiative, resources can be invested in so called Urban Development Funds (UDFs) which should pass the money on to projects eligible for funding. In contrast to traditional grant financing, the JESSICA instruments have a revolving character (loans, equity, guaranties). This raises the question of whether and when the employment of these new funding types is appropriate.In general, public authority interventions are a justified means to remedy market failures. We apply this idea in the context of urban development projects by analysing the three main market imperfections, namely external effects, imperfect competition and incomplete information. For combinations of these imperfections, we derive suitable types of funding. Depending on the sensitivity to the respective imperfections, we categorise a range of urban development projects which are suggested to be appropriate for Urban Development Funds under the JESSICA initiative. This reveals that projects related to culture, tourism, retail as well as public buildings and spaces should get grant funding as they are mainly prone to market failures arising from external effects. Otherwise, projects in the fields of transport, energy, communication, education, research, business parks, and start-ups are indeed suitable for JESSICA-type funding. This analysis contributes to existing remarks on the advantages of the JESSICA Initiative by going beyond practitioners' argumentations. It seems to be extremely important to understand the mechanisms behind market failure corrections, because the appropriate funding type is crucial to not distort normal market functioning. Thus, the connection between the omission of project initialisation and market failures should always be carefully investigated before the selection of funding instruments. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_113&r=ure |
| By: | Liu, Yu; Gallimore, Paul; Wiley, Jon |
| Abstract: | We investigate whether nonlocal buyers of real estate pay different prices for similar assets as compared to local buyers. An efficient real estate market would operate against this but empirical studies leave the question unresolved. While some studies fail to detect or confirm price differences (Turnbull and Sirmans, 1993; Watkins, 1998; Clauretie and Thistle, 2007), other studies do detect them (Miller et al., 1988; Lambson et al., 2004; Ihlanfeldt and Mayock, 2012). Most studies of the question have utilized residential real estate and have focused on owner-occupiers. Two studies have used investors, but these have each considered only a single market (Phoenix; Las Vegas). We extend the literature in this study by examining investors in office properties across 138 US markets and, uniquely, by considering the question of price differences when investors sell as well as buy. We investigate this using a CoStar database of 10,971 purchases and 11,444 sales between 1996 and 2012. Aware of limitations in some previous studies, we use a propensity score matching approach to produce matched samples that reduce the potential effects of conflating factors such as selection bias, investor clienteles (Wiley, 2012) and marketing duration. We find nonlocal investors significantly overpay on purchase by an estimated 13.8% relative to similar assets purchased by local investors. We attribute this to a combination of information asymmetry and anchoring (by those investors from markets whose prices are higher than where they buy). We find that, upon exit, nonlocal investors sell a discount of 7% relative to similar assets sold by local investors. This is again attributable to information asymmetry but is not explicable by anchoring. Overall, nonlocal purchases and sales result in significant relative capital value underperformance. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_342&r=ure |
| By: | Christian Ewerhart |
| Abstract: | The Hotelling game of pure location allows interpretations in spatial competition, political theory, and professional forecasting. In this paper, the doubly symmetric mixed-strategy equilibrium for n ≥ 4 firms is characterized as the solution of a well-behaved boundary value problem. The analysis suggests that, in contrast to the cases n = 3 and n → ∞ , the equilibrium for a finite number of n ≥ 4 firms tends to overrepresent locations at the periphery of its support interval. Moreover, in the class of examples considered, an increase in the number of firms universally leads to a wider range of location choices and to a more dispersed distribution of individual locations. The results are used to comment on the potential benefit of competition in forecasting markets. |
| Keywords: | Location, Hotelling game, mixed-strategy equilibrium, boundary value problem |
| JEL: | C72 D43 D72 L13 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:168&r=ure |
| By: | Vlachostergiou, Vassiliki; Hutchison, Norman |
| Abstract: | The scale of the real estate development investment challenge allied with capital budget constraints has meant that the prospect of implementing innovative finance instruments has gained considerable momentum in recent years, at a time when Western European government policy has shifted towards supporting the decentralisation of power to local authorities. For instance in the UK, the introduction of the Community Infrastructure Levy (CIL) has provided local authorities with revenue generating streams to fund infrastructure provision, contributing to the economic viability of real estate development. At a macro-level, the broader economic aspects of the ‘crisis’ of finance in the EU post 2007-08, have taken urban development and regeneration trajectories in different directions. Furthermore, the effects of this ‘crisis’ at a regional EU level have seen different national export structures and dependence on other sources of foreign-currency earnings.In this research, exploration of financial instruments for real estate development is taken from a pan-European perspective. Views are targeted to Western European nations of the United Kingdom, Germany, France, The Netherlands and Spain. The broader pan-European context has been researched institutionally, such as through the JESSICA (Joint European Support for Sustainable Investment in City Areas) initiative of the European Commission, developed in co-operation with the European Investment Bank (EIB) and the Council of Europe Development Bank (CEB). The clear aim and output from the project has been to generate a contemporary conceptual model of financial instruments, used in real estate for urban development and regeneration in Western Europe, that have developed post 2007-08 Global Financial Crisis (GFC). The research has been sponsored by the RICS (Royal Institution of Chartered Surveyors) Research Trust. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_227&r=ure |
| By: | Popescu, Ana-Maria; Curea, Stefania-Cristina |
| Abstract: | In approaching the value of a real estate investment through the income, the most important matter is to credibly determine the market rent level. The current practice of taking over from different public data sources, a level of the market rent from an interval of contractual or requested rents and using it as a representation of a market rent is not appropriate, out of at least two reasons, respectively: (a) the real estate investment subject of the assessment has some features that can be substantially different from the features of comparable real estate investments; and (b) in the current practice, the real estate investors grant many facilities in order to attract and maintain the tenants, which makes the effective rent to be different from the displayed rent.The authors try to describe and argue the need of taking into account these two reasons. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_239&r=ure |
| By: | Levy, Deborah; Cooper-Thomas, Helena; Morrish, Sussie; Ballantine, Paul |
| Abstract: | The Christchurch earthquake of the 24th February 2011 devastated the New Zealand city and in particular its Central Business District. Extreme events such as these not only highlight the vulnerability of our communities, but also demonstrate how communities are dynamic places that are in continual change. There are similarities in the issues that communities face after a natural disaster regardless of the type of disaster that has occurred. Christchurch illustrates that the decision people make on whether they stay to rebuild or move elsewhere is highly dependent upon what happens in property markets both physical and financial. The ability of developers and key industry players to obtain financing and the cost to rebuild to new specifications will decide whether businesses stay in the same area of the city or relocate. Relocation decisions also hinge on how badly affected areas of the city are and the types of damage caused to property and infrastructure. In Christchurch it is evident that some areas that were not particularly desirable before the earthquake but were left relatively unscathed have become highly sought after. This paper utilises Christchurch to examine the relocation decisions of small and medium sized businesses that were located in the CBD. In particular it examines the phenomena of clustering in relation to socialisation and market efficiency. The research takes a qualitative approach by undertaking in-depth interviews with real estate agents working relocating businesses and a number of in-depth interviews with decision makers within a range of small and medium sized businesses.It is suggested that the decision making process of these businesses are common to disaster areas regardless of the type of disaster occurring and will thus explore how people and businesses interact with property. This study will help to increase our understanding of these relocation decisions and the dynamic and eclectic nature of rebuilding after an extreme event. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_188&r=ure |
| By: | Kauko, Tom |
| Abstract: | Ideally, the notion of innovation enables paving the avenue of research towards evaluation of sustainability in all research areas dealing with the built environment, also real estate. While innovativeness can be understood as an extension of the current paradigm in urban real estate economics, it can also be understood as an alternative paradigm involving more evolutionary perspectives. What happens in the mother discipline of general economics is a reasonable prediction of what eventually will happen in applied disciplines such as real estate economics. However, given the vast differences between physical and asset-oriented views of real estate, it is realistic to assume inertia among real estate economists trained in neoclassical economics in adapting new concepts such as evolutionary dynamics, in which case some other discipline (economic geography, for instance) must set the cross-disciplinary agenda. This paper reviews various literatures involved in this adaption of the innovation-concept and seeks to make connections across them. It argues for the need for real estate economists to open up horizons for dialogue with other disciplines. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_15&r=ure |
| By: | Stocker, Emanuel; Koch, David |
| Abstract: | The residual method is applied for developing land or projects to estimate the value of an undeveloped land. It is used when there are no comparable market prices available. The residual approach starts with a notional value, the gross development value (GDV) from similar projects and less the development cost and also the profit of the developer the residual value (residuum) will be arrived. For the calculation there are many assumptions necessary and the results react very sensitively to even small changes in the input variables. The purpose of this paper is on one hand the theoretically analysis for the sensitivity and on the other hand it presents an empirical analysis based on real input variables for land values in Austria. With the aid of sensitivity analyses the influence of the input parameters are investigated. It is well known and also in the literature it is noted that the residual method is a highly sensitive method of property valuation. The results shows that the sensitivity of the residuum - more precisely, the deviations - depends on the ratio of the property value or the building value to the GDV. The lower the property value or the building value on the GDV is, the higher is the deviation of the residuum. The differences are enormous and the empirical study for Austria shows that the residual method for residential properties is only useful in certain areas. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_168&r=ure |
| By: | Thiel, Stefan; Nadler, Michael |
| Abstract: | Purpose - The main objective of this paper is to illustrate the prospects but also the limits of quantifying external benefits of urban and real estate development projects using the method event study. Another objective is the comprehensible derivation of an appropriate controlling system in step with actual practice.Design/methodology/approach - We first provide a general theoretical background by determining the factors for urban and real estate projects and by highlighting the increasing importance of cooperative models. The presentation of the event study builds the methodological framework for the quantification of external benefits. Further, we develop a systemization of external benefits using a set of four dimensions: targets, stakeholder, space and time. Based on this, the project example Le Quartier Central (Duesseldorf) then serves both, clarifying the achieved systematization and applying the method event study.Findings - Existing measurement and controlling instruments are only of limited use for the striven extensive analysis of external benefits in a management and controlling process. A combination or enlargement of the existing instruments (e.g. CBA or event study) towards an integrated controlling approach seems to be necessary at this stage. Research Implications - Further research should focus on the application of suitable methods to measure or pricing external benefits within a controlling framework. Practical implication - The intended outcome of this paper is an increasing awareness of the importance of analysing respectively measuring external benefits of urban development projects followed by an increasing application of controlling methods in the field of urban planning.Originality/value - The results of this paper are of high value for practitioners in several fields of urban planning, e.g. municipal planners receive methodological support in all stages of a project life cycle to assure sustainable urban development. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_160&r=ure |
| By: | Papastamos, Dimitrios; Stevenson, Simon |
| Abstract: | The paper compares and contrast the bias, accuracy, and uncertainty in US housing start forecasts. In comparison to the large forecast accuracy literature to have considered macroeconomic series a relatively smaller number of papers have considered the accuracy of property forecasts. Even in this case the majority have looked at commercial real estate. Papers such as McAllister at al. (2007), Bond & Mitchell (2011) and Matysiak et al. (2012) all consider aspects of the IPF Consensus Forecasts for the UK commercial market. Two recent papers (Pierdzioch et al., 2012, 2013) do consider forecasts of housing starts. Our analysis compliments the analysis contained in Pierdzioch et al. (2012, 2013) who concentrate on whether forecasters tend to herd. This paper examines one-year-ahead forecasts, provided by Consensus Economics, covering a total sample period of 1989 to 2012. The focus of our paper is initially on the overall accuracy of the forecasts of US housing starts. Using conventional measures of forecast accuracy we consider the overall performance of the professional forecasts over the course of the an extended cycle. Using a panel framework we then consider the rationality (i.e. bias and efficiency) of the forecasts based upon the Holden & Peel (1990) framework. Finally, building upon papers such as Fulerton et al. (2000, 2001) and Stevenson & Young (2007), we compare the accuracy of the published forecasts with econometrically estimated forecasts. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_80&r=ure |
| By: | Ryan, Paul; Branigan, Clare; Muckley, Cal |
| Abstract: | This paper explores the impact of behavioral biases, specifically the winner’s curse and anchoring and insufficient adjustment on auction outcomes in the Dublin residential real estate market in the period immediately preceding the peak of what became the biggest property crash in recent history in the developed world. In addition, we investigate whether the incidence of these biases is conditioned by two bidder characteristics, his/ her gender and whether the winning bidder is experienced in the residential real estate market. We find that bidders do not shade their auction bids to avoid the winner’s curse, and that auction outcomes are driven by bidder anchoring on the advertised auction guide price, and also the initial auction bid announced by the auctioneer, and are less influenced by the comparable sales prices of similar properties or prices derived from a hedonic asset pricing model. In addition, we find, contrary to expectations, that female bidders are no less prone to behavioural biases in decision making than their male counterparts and that winning experienced bidders, despite their level of expertise, tend on average to pay more for comparable properties than their less experienced counterparts. Our results in aggregate can be interpreted as being consistent with a market where behavioral biases play a part in driving auction prices and are consistent with the arguments made by Shiller (2007, 2008) in his analysis of the US sub- prime crisis. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_29&r=ure |
| By: | Donovan, Jamie; Postila, Mikael; Koponen, Seppo; Viitanen, Kauko |
| Abstract: | In this paper, the authors explore the central tenets behind automated valuation models (AVMs) and professional auditing, reconcile them, and aim to provide a solid framework upon which auditors can make their case when auditing AVMs. More specifically, we present a mass valuation model for the Finnish residential property market used by Orava Residential REIT and its annual auditing process conducted by Realia Management Oy. Emphasis is given to the auditing process.Despite their long methodological history (Hotelling 1931, Rosen 1974), automated valuation models have been used by Real Estate professionals for a relatively short while, only gaining traction with the advent of digitisation. Currently, these methods are primarily used for taxation and mortgage evaluation purposes and their use in defining fair value is less common. According to the international accounting standard IFRS 13, a company must value investment properties to IFRS fair value. The company management is ultimately responsible for defining fair values.The use of AVMs in fair value definition requires external opinion of values and inspection of in-house modelling due to investor demand and local legislation. The combination of increasingly advanced valuation tools and growing popularity of new real estate investments ownership structures that allows for easy investment by real estate non-professionals creates additional transparency needs. These needs are fulfilled by external auditing which tests the validity of the assumptions, the data and the models and processes that were employed in the use of the valuation tools. Auditing quality is maintained by organisations such as the Auditing Standards Board and the International Organisation of Standards. However, outside accounting and certification audits, a relative freedom exists. In auditing AVMs, task-specific tools, such as guidance notes are either missing or are still under development (RICS, IVS).Orava Residential REIT solely uses its in-house, multivariate regression model for determining fair values in quarterly and annual financial reporting. This model is presented in the first section of the paper. In the second section the annual auditing process of Orava AVM is explained in detail. In the third and last part, the authors discuss the best practices of auditing while exploring and taking into account nuances that relate specifically to real estate valuation and automated value estimation models. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_148&r=ure |
| By: | Miguel Casares (Universidad Pública de Navarra University); Hashmat U. Khan (Department of Economics, Carleton University) |
| Abstract: | Entry rates have a negative long-run effect on US regional growth, which contradicts innovation-based growth models. This puzzle is resolved when a model-consistent specification is estimated using per capita entry growth. Evidence supports the Schumpeterian hypothesis of a positive relationship between exit and economic growth. |
| Keywords: | Entry-exit rates; Per capita entry-exit growth; Economic growth |
| JEL: | O30 O40 O51 |
| Date: | 2014–07–15 |
| URL: | http://d.repec.org/n?u=RePEc:car:carecp:14-08&r=ure |
| By: | Maier, Gunther |
| Abstract: | The hedonic price method is well established as a method for deriving real estate price indices and for identifying the factors that influence real estate prices in the market. Despite a close relationship to the traditional sales comparison approach and conceptual and statistical advantages, the hedonic price method is used much less in the appraisal of individual objects. In recent years, locational facors have been increasingly included into the set of explanatory variables as well as into the specification of the error term. This has not only improved the explanatory power of the method, but also introduced additional challenges for the interpretation of results and particularly for the use of these results for the appraisal of individual objects.The paper discusses the hedonic price approach to real estate appraisal and especially its relation to the traditional sales comparison approach. It will be shown that spatial econometric methods can be applied to improve the power of the hedonic price regression. The main part of the paper will be devoted to the question of how to utilize the results of the hedonic regression for appraisal of individual objects, what challenges the different possible specifications of the regression equation on the one hand and of the structure of the error term on the other hand raise. The paper presents algorithms for handling these computational issues and presents simulation results for each case. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_54&r=ure |
| By: | Bushnell, Catherine; Nanda, Anupam |
| Abstract: | This paper investigates the scale and drivers of cross-border real estate development in western Europe and central and eastern Europe (CEE). Drawing upon existing literature on the integration of international real estate markets, we make some inferences on expected patterns of cross-border real estate development flows and use a transaction database to assess these flows. A range of economic and real estate variables are explored in this analysis. Whilst western European markets tend to be dominated by local developers, much higher levels of market penetration by international real estate developers are found in the less mature markets of central and eastern Europe. Our modeling approach is two-pronged: explaining volume of development flow as well as probability of any development flow taking place between two countries. Empirical modeling based on Poisson pseudo-maximum likelihood and Poisson-logit maximum-likelihood hurdle model specifications reveal the importance of size of the economies, distance between countries, extent of globalization and EU membership as significant determinants of cross-border real estate development flow. These results are strongly robust across a number of model specifications and samples. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_247&r=ure |
| By: | Callanan, Judith |
| Abstract: | Purpose - The purpose of this paper is to determine the accuracy of Contingent Valuation when assessing the value attached to the presence of a negative environmental impact, such as High Voltage Transmission Lines (HVOTLs)Design/methodology/approach - A case study was undertaken to:i.Carry out a quantitative analysis to determine the effect of the HVOTL on property values.ii.Determine the perceptions of property owners to the presence of the HVOTLs, andiii.Determine the property owners' 'willingness to pay' to have the HVOTLs removed, Findings - The results show a negative effect of 20% to those properties that are adjacent to the HVOTLs. This effect drops to a negligible amount at 100 metres. Owners believe there is a 10% effect whether they are adjacent or up to 400m from the HVOTLs. The majority of owners opposed any contribution towards removing the HVOTLs. A better understanding is required by Property Valuers, regarding how to appropriately measure the effect of HVOTLs on property values. Research Implications - The implication of this research is that Property Valuers need to change the way they take into account the presence of HVOTLs when valuing property, with more attention being taken to proximity. Three different approaches were taken to determine impact on property values, with each providing a different result. Originality/value - Results expand on current knowledge by demonstrating a disparity between what people say the value effect is, and what the actual effect is on their property value. Property owners showed a resistance against contributing towards removing the HVOTLs, although expressed their belief that their presence created a negative effect. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_75&r=ure |
| By: | Gibilaro, Lucia; Mattarocci, Gianluca |
| Abstract: | Real estate market trend could affect the value of both the direct exposures in property loans and the real estate collaterals of loans, therefore banks' performance and/or risk could change significantly in the case of real estate market collapse or expansion (i.a. Wheaton, 1999). Indeed, during the recent financial crisis, the real estate was features by a strong decrease in loans with respect to the before crisis period (Ivashina and Sharfstein, 2010). Literature focuses the attention prevalently on the effect of a change in the property prices on the macro-variables and the monetary aggregates (Quigley, 1999). Only few studies look at the effect of the real estate market trend on the banks'lending policy and bank's performance (Davis and Zhu, 2004) taking into account bank's characteristics . In the analysis of the banking features, no evidence is provided on the relationship between real estate market trend and the bank's performance and risk . Moreover, the evidences provided by such studies do not control for the type the bank and the loan purpose.Considering a representative sample of European banks and using the BIS property index for the reference country of the bank, we study the relationship between the property market trend and the bank performance / risk exposure, considering also lagged relationships and testing for any relevant causality relationship.. Following the approach proposed by Eisenbeis and Kwast (1991), we identify real estate banks in our sample and we test for the existence of any significant difference respect to other banks. Moreover, we control the evidences for the pre and post financial crisis period. Results demonstrate that real estate banks do not perform always the worse (the better) during a real estate market downturn (upturn) and the reaction to the market trend is driven also by other features of the bank. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_248&r=ure |
| By: | Blumberg, George |
| Abstract: | Heat waves can be deadly and are the leading urban environmental risk [Anderson and Bell, 2009;Guha-Sapir et al., 2010]. The most serious health conditions related to extended high temperatures are heat stroke and heat exhaustion. But these ailments tell only part of the story as most of those admitted to hospital during a heat wave arrive suffering from a wide range of indirect problems [Flynn et al., 2005], such as heart attacks [Madrigano et al., 2013], asthma and organ failure brought about by dehydration.Heat extremes occasionally cause large numbers of casualties leading to mortality rates that resemble epidemics [Gover, 1938]. Consider the impending risk of heat extremes on cities, a systematic method for assessing the risk of these extremes is proposed in this paper. The management of risk comes in several forms. For example, an understanding of the epidemiology of heat related illness is essential in developing strategies to reduce vulnerability of populations to temperature extremes. Impacts can be highly variable and depend on time of year, duration and intensity of the event, as well as aspects of demography and physical geography. For example, damaging heat impact often occurs at relatively low temperature or in pockets of the city with poor ventilation or with microclimates brought on by the urban heat island effect.Additionally, experience has shown that heat related mortality and morbidity can be significantly reduced if citizens are warned and that the most vulnerable members of the population are supported [Sampson et al., 2013]. Reduction of casualties to acceptable levels of public health requires additional effort and expense [Lass et al., 2013]. This includes identifying the populations most at risk, developing an effective plan and appropriate equipment to support them and obtaining the correct trigger to instigate an intervention. Plans that have taken these factors into account show evidence of success [Kalkstein et al., 2011]. Elements of the organisation required are the focus of this paper. With a good assessment of risk, civic planning for building resilience to the risk of heat extremes can be prioritised as heat waves are expected to increase. Two major changes drive this: one climatological and the other demographic. Firstly, the intensity and duration of extreme will increase as the climate warms [Coumou and Rahmstorf, 2012; Coumou et al., 2013]. There is even the suggestion that temperature extremes are increasin |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_176&r=ure |
| By: | Zanlorenzi, Elena; Schaeffler, Ilona |
| Abstract: | Does it make more sense to buy or to rent a home from an investment perspective? The answer, in an era of historically low interest rates and perpetually rising real estate values appears to be obvious: buy. But it could also be a better financial move from an investing standpoint to rent rather than to buy because people rarely consider some major costs of owning a home like operating costs and the impact of a mortgage.But what explains the differences in homeownership rates in Europe? A general trend is the increase in homeownership rates in most EU countries reflecting demographic and economic developments. This trend has also been greatly boosted by policies encouraging home ownership. Today homeownership ranges from over 90% in some Eastern European countries (Romania and Bulgaria) as well as in Southern European Countries like Italy and Spain, to 40% in Germany and Austria. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_336&r=ure |
| By: | Branigan, Clare; Brugha, Cathal |
| Abstract: | In this study, we examine if behavioural biases, such as framing effects, escalation of commitment, and overconfidence are present when residential property purchasers are choosing between alternative properties. To accomplish same, we use a Multi-Criteria Decision-Making (MCDM) approach to examine the behaviour of property purchasers in Dublin during the property boom of 2005.The study was designed using a case study approach and the participants used a Multi-Criteria Decision-Making analysis tool to aid in their selection between alternative properties. The decision tool that was used is Direct-Interactive: i.e., the Decision-Maker gives scores and weights directly and is able to adjust them during the process. It also uses Structured-Criteria, i.e. it tracks elements of the decision to specific disaggregated criteria of the decision-maker.This research finds that using a decision tool provides better decisions as was expected from the method, however, a subset of property buyers resisted applying the tool to make non-rational choices. This indicates how strong behavioural biases can be and how influencing their affect is, even when making large monetary decisions. In conclusion, when a decision-making tool is introduced to enable property purchasers to improve their decision-making capability, a subset of property buyers may resist applying the tool to let their behavioural biases potentially override rational decision-making. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_220&r=ure |
| By: | Maiti, Abhradeep; Indra, Debarshi |
| Abstract: | We use a large panel dataset covering the years 1988 to 2010 to estimate county specific total wage elasticities of labor demand for four highly aggregated industries in the United States. Our industries are construction, finance/real estate/service, manufacturing, and retail trade, which together employ on average over eighty percent of the U.S. national labor force per year. We use both the conventional constant coefficient panel data model and a random coefficients panel data model to estimate labor demand elasticities in various industries. We find the labor demand curves in all the industries studied to be downward sloping. We also find significant evidence that the total wage elasticity of labor demand exhibits regional variation. The labor demand estimates obtained in this study are useful to investigate the differential impact of various shocks and policy changes on the labor market. As an example, we use the estimated county specific labor demand elasticities to identify the impact of union membership and right to work laws on labor demand. We show that labor demand tends to become less elastic with higher union membership rates. We also find that labor demand becomes more elastic if a right to work law is in place. |
| Keywords: | Labor Demand Elasticity, Random Parameter Model, Union Membership, Right to Work Law |
| JEL: | C35 J20 J23 J50 R14 R15 R21 R41 |
| Date: | 2014–07–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:57544&r=ure |
| By: | Janssen, Ingrid; Dijkman, Wouter; Heij, Tim Op; Willems, Rick; Borgers, Aloys |
| Abstract: | Dutch inner-city shopping areas face a decreasing number of visitors and declining sales volumes. Internet shopping, economic decline and an ageing population are considered to be the main causes. Improving the atmospherics of inner-city shopping areas may be a solution to improve the competitiveness relative to other recreational destinations and attract more visitors to shopping centres. The aim of this research is to empirically determine which atmospheric characteristics contribute to the shopper's appreciation of inner-city shopping areas. A list of 25 environmental characteristics formed the basis of a survey that was conducted in the historic inner-city shopping areas of two Dutch medium sized cities: Maastricht and 's-Hertogenbosch. Within each of these inner-city areas, four locations were selected; two historical and two non-historical. At each location, the 25 characteristics were firstly assessed by the researchers. Secondly, in total 918 consumers were invited to rate each characteristic. In addition, each respondent rated the overall appreciation and the sphere of the location under consideration. Furthermore, each respondent was asked to rank order the four locations of the particular inner-city considering the most favorite shop location and the most atmospheric shop location. Decision tree analysis was used to find out if and which physical characteristics of the locations cause the largest impact on the consumers' appreciations. Furthermore, multinomial logit (MNL) choice models were estimated to predict the most favorite and most atmospheric locations from the rank orderings provided by each respondent. This analysis showed which combination of observed characteristics contributed most to the respondent's first choice of favorite location and the respondent's first choice of most atmospheric location. Although the explanatory power of the models is limited, some observed characteristics appeared to significantly influence the shoppers' preferences. The results showed that the most favorite shopping area does not need to be the most atmospheric shopping area. Nonetheless, adjusting shopping areas to the atmospheric characteristics that contribute significantly to consumer's appreciation will help shopping center managers and developers to improve the competing power of their shopping areas. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_96&r=ure |
| By: | Oprescu, Claudiu; Buse, Lucian; Ganea, Mirela |
| Abstract: | The analysis of relevant data to develop a market value opinion requires two important steps in the valuation process before the applicable approaches to value are applied. Market/marketability analisys begins the process of narrowing the focus from a broader macro view to data that is especially pertinent to the appraised property. Highest and Best Use is the overriding to be applied in the analysis and ultimate selection of comparable data used in real estate valuation. In all valuation assignments, opinions of value are based on use. Highest and Best Use relies on that analisys to identify the most profitable, competitive use to which the subject property can be put. Highest and Best Use is often identified as the key concept supporting real estate use and value decisions. This paper addresses this ambiguity and identifies the theoretical premises of Highest and Best Use as employed in the various land use disciplines. There are many highest and best use problems associated with real estate appraisels today. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_230&r=ure |
| By: | Ke, Qiulin; White, Michael |
| Abstract: | This paper represents the first systematic attempt to develop an econometric model of retail rent determination in Chinese cities. It investigates rent determination in three major Chinese retail centres – Beijing, Shanghai and Guangzhou – over the period 1999 to 2012. The study was inspired by the conspicuous lack of research on the determinants of retail rents in China, which is surprising given the increased prevalence of international investment activity in retail property in China and as one of the biggest emerging markets, China’s enormous population, and rapid increase in consumer spending. In this paper a theoretical model of retail rent determination is constructed based on the inclusion of broad demand side and supply side influences. Subsequently, this model is estimated for the three markets considered and a preferred specification for each market is derived. Following on from this, a time series cross-sectional methodology is deployed to test the most important common rental influences across the three markets. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_110&r=ure |
| By: | Heitel, Stephanie; Kämpf-Dern, Annette; Pfnür, Andreas |
| Abstract: | Managers of public housing companies are confronted with multiple demands, like e.g. providing affordable housing, improving energy-efficiency of their building stock and distributing profit to the municipality. Strategies to balance these different interests are required for optimizing performance.Integrated Corporate Social Responsibility (CSR) strategies build on stakeholder engagement to ensure that economic, social and environmental criteria from different perspectives are included in decision-making. Several studies indicate that stakeholder management improves performance. However, stakeholder integration efforts can be costly and time-consuming. Thus, managers need to know how to integrate stakeholders in an efficient and effective way. The purpose of this research is to develop stakeholder integration strategies for housing companies depending on stakeholder types and context.We use a single case study design and select a German municipal housing company which has a pioneering status in CSR activities. Qualitative and quantitative methods are applied including stakeholder interviews, a stakeholder survey and document analyses. The environment of the housing company is described including stakeholder types, issues, and heterogeneity of demands. By combining the gained insights, we develop hypotheses on stakeholder typologies and on strategies for their suitable integration.Due to the single case design, further empirical testing of the developed hypotheses is needed before our findings can be generalized. Managers of housing companies find ideas on how to integrate specific stakeholder types adequately. By integrating multiple stakeholder perspectives in decision-making, companies might develop more sustainable solutions and increase public value creation.Despite extensive research on stakeholder management, there is still a lack of practical approaches for deciding on stakeholder integration strategies. Our study contributes to further close this gap by developing strategies which rely on structured stakeholder analyses. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_197&r=ure |
| By: | Porumb, Vlad Andrei; Anghel, Ion |
| Abstract: | In this paper we analyze the impact of the Basel II adoption on the ability of European real estate companies to access bank loans. The Basel Committee on Banking Supervision (BSBS) adjusted their regulatory recommendations to answer the potentially problematic concentration of loans in the real estate industry. Relative to the former Basel I Capital Accord, the new banking regulation introduces a more detailed categorization of real estate lending categories, with more sensitive credit risk weights. In all classes of Basel II application, Standardized, IRB and A-IRB, credit risk exposure significantly evolved relative to Basel I’s dichotomous residential mortgage/commercial real estate loans categorization. The more sophisticated and risk-sensitive classification is likely to have influenced the borrowing capacity of real estate companies in the post-Basel II adoption period. We focus on the enlarged EU countries because the adoption of Basel II was mandated in 2008 for all listed firms. This homogeneous setting allows us to better assess the impact of the new banking regulation on the lending of real estate companies. To our knowledge we are the first to document the impact of a change in banking regulation on the lending in the real estate industry. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_235&r=ure |
| By: | Fuerst, Franz; Shimizu, Chihiro; Yoshida, Jiro |
| Abstract: | This paper aims to extend the existing evidence on the investment value of green buildings to international markets, specifically the residential real estate market in Japan. Using a unique transaction database of condominiums in the Tokyo metropolitan area and a hedonic analytical framework, we find that green buildings command a small but significant premium on both asking and transaction prices. The magnitude of this premium is found to fluctuate depending on market conditions. This finding is consistent with findings from other countries. As far as we are aware, this is also the first hedonic study of green value that incorporates detailed buyer characteristics. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_265&r=ure |
| By: | Le Roux, Pieter |
| Abstract: | This paper addresses the application value of a methodology that uses an organization-centered Accommodation-Choice Model (AC-Model) for improving the match between user-requirements and organizational objectives with accommodation and/or real estate (Voordt et al., 2011).The study was performed with 150 2nd-year students during the 2012-2013 / 2013-2014 Corporate Real Estate Management (CREM) curriculum of the Academy for International Real Estate and Facility Management (IREFM) at the NHTV University of Applied Sciences in Breda, The Netherlands. Objectives of the study were: (i) introduce student-professionals to the concept of using a process model for supporting evidence-based decision-making in real estate and property management, (ii) create am awareness and in-depth understanding of the relationships between organizational ambitions and conceptual decision-making, and (iii) assess differences in take-up and application between compulsory and recommended use of the process model in problem-based learning. The methodological approach focused on applying the process model to real-life case studies where new workplace concepts have been introduced. In the 2012-2013 academic year the application of the model was a mandatory component of analyzing 6 different case study work environments, while the 2013-2014 academic year theme assignment whereby students were asked to analyze the functional optimization or transformation of existing vacant office buildings, only recommended the use of the model. In executing their assignments, groups were asked to structure the execution and outcomes of their assignments according to the process model steps.The main outcomes of the study indicate (i) the applicability of the AC-Model as a central structuring element in identifying and documenting organizational ambitions / intentions and the related conceptual choices in workplace change, (ii) the benefits of interactive learning through active application of the process model, and (iii) the added value thereof in creating and increased level of awareness and professionalism amongst students in terms of evidence-based decision-making on organizational accommodation. This research brings originality to the topic of CREM-education through the application of a decision-making support model as value-adding methodology in supporting conceptual decision-making on issues related to real estate and accommodation based on organizational goals and ambitions. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_140&r=ure |
| By: | Glumac, Brano; Kant, Gijs; Hof, Alfred van 't; Schaefer, Wim |
| Abstract: | Purpose - Dutch municipalities have an important role in the land market. They may act as an active stakeholder in land developments. At the same time, municipalities are entitled to set the land use policies. As a result, Dutch municipalities are the largest land owners present at the Dutch land market. The impact of the economic crisis badly damaged the financial situation of the municipalities due to their large land portfolio. Therefore, it is important to quantify those risks and test new land use policy solutions for the most risky cases.Design/methodology/approach – First, to indicate which municipalities have the highest financial risk, this paper applies a multi criteria analysis with publicly available financial data from each of 67 municipalities in Noord-Brabant region, the Netherlands. Second, 3 relevant cases within the most vulnerable municipalities were selected in order to derive 2 sustainable land use policy and relevant criteria to estimate their application potential. To estimate the importance of the success criteria and rate the potential policies a fuzzy Delphi method is used. Additionally, we distinguish two groups of experts, municipality (13 participants) and independent consultants (15 participants). Fuzzy Delphi technique is considered as an excellent method to gather such diverse panel data since it supports expert diversity in its procedure and calculation.Findings - This paper benchmarks the municipalities with the greatest financial risks and investigates the applicability of sustainable land use intervention policies.Originality/value – First, this paper reveals the severity of the financial situation of municipalities that took the active role in land market. In addition, this paper contributes to the larger pool of possible sustainable land use policies by identifying, structuring and rating the most relevant criteria to test the best applicable policy. For this purpose, we introduced the method that highlights the importance of rigorous procedure for the panel data collection and advances the weighting of the criteria and rating of potential new land use policies. This is of particular importance for the policy makers since the future land use influences the future marketability and cost of a development. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2014_70&r=ure |
| By: | Oikarinen, Elias; Hoesli, Martin; Serrano, Camilo |
| Abstract: | We use sector level REIT and transaction-based direct real estate data for the period 1994-2010 to provide a clearer understanding of the dynamic relations between public and private real estate returns. We add leverage to private returns to make the private data more comparable with the REIT data. We also include economic fundamentals in the analysis to take account of the influence of fundamentals on real estate market dynamics. Moreover, we consider the influence of the 'escrow lag' in the recording of private market prices. The estimated vector error-correction and vector autoregressive models, Granger causality tests, impulse response functions and variance decompositions all provide evidence of REIT returns leading private returns in the office, retail, and apartment sectors. These lead-lag relations appear to be due to the slow reaction of private market returns to shocks in REIT returns and in some economic fundamentals. In the industrial sector, such lead-lag relation cannot be observed, however. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_145&r=ure |
| By: | Santovito, Rogerio Fonseca; da Rocha-Lima, Joao |
| Abstract: | Purpose - This paper describes a multi-year research, developed to verify the validity of Concept Mapping as a resource to promote meaningful learning, in order to cope with students' heterogeneity in a real estate education environment.Design/methodology/approach - Three quasi-experimental, multi-year case studies were conducted at the Real Estate Management discipline of an MBA course. Each time the discipline was given, the procedure was to develop activities that involved the drafting of concept maps about specific topics on Real Estate Management; more specifically, the alignment between business strategies and real estate management. After each activity, the maps were analyzed in terms of the nature of concepts, their relations and hierarchy. The effects of the use of Concept Mapping on students' learning experience were then analyzed.Findings - The results show a clear evolution between the concept maps produced at phase 01 (diagnostic evaluation) and phase 02 (months later), but the most important thing is that after months from phase 02, when the same activity took place in another context (phase 03), students were able to develop concept maps as complex as the ones produced at phase 02. The findings support the assertion found in literature that the knowledge acquired through the use of concept maps is anchored in students' prior knowledge, consolidating itself as new subsumers in students' cognitive structure. The use of Concept Mapping helped the educator to cope with students' heterogeneity in terms of professional experiences and academic backgrounds.Research limitations/implications - Due to the non-randomization of the students, this research does not allow a generalization of the findings, but it does provide empirical evidence that supports the didactic use of Concept Maps in real estate education. Some practical difficulties related to the drawing of the maps were occasionally related, and future research will try to evaluate whether or not more agile, software-supported Concept Mapping techniques are appropriated to be used within this didactic framework.Originality/value - There is no bibliography on concept mapping techniques applied to real estate education. In this paper an overview of concept mapping is provided, and presented as straightforward way to cope with student heterogeneity. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:arz:wpaper:eres2013_289&r=ure |