Pub Date : 2020-05-05DOI: 10.1080/09599916.2020.1758754
Jan Reinert
ABSTRACT The traditional German Income Approach (GIA) is often criticised for resulting in smooth and stable estimations of value that do not adequately represent market movements. So far, empirical evidence has been scarce. The first part of the analysis consisted of a direct comparison of actual valuations and sale prices according to GIA and DCF models in Germany. The second part of the analysis used hedonic regressions to derive fitted sale prices that could be compared to valuations of held properties in order to assess valuation accuracy on a larger and more homogenous dataset. The Heckman Correction was used to reduce the impact of sample selection bias. The research hypothesis, that GIA valuations and DCF valuations result in equally accurate proxies for market prices, could not be rejected. Both techniques produced on average a comparable amount of valuations within the selected threshold of 15%. This finding suggests that the underlying valuation technique, at least with respect to DCF and GIA, is not able to explain the observed smoothness of German valuation-based indices. Future research should focus on a country comparison of valuation accuracy in order to put the results of this study into perspective.
{"title":"Accuracy of the German income approach in comparison to German DCF valuations","authors":"Jan Reinert","doi":"10.1080/09599916.2020.1758754","DOIUrl":"https://doi.org/10.1080/09599916.2020.1758754","url":null,"abstract":"ABSTRACT The traditional German Income Approach (GIA) is often criticised for resulting in smooth and stable estimations of value that do not adequately represent market movements. So far, empirical evidence has been scarce. The first part of the analysis consisted of a direct comparison of actual valuations and sale prices according to GIA and DCF models in Germany. The second part of the analysis used hedonic regressions to derive fitted sale prices that could be compared to valuations of held properties in order to assess valuation accuracy on a larger and more homogenous dataset. The Heckman Correction was used to reduce the impact of sample selection bias. The research hypothesis, that GIA valuations and DCF valuations result in equally accurate proxies for market prices, could not be rejected. Both techniques produced on average a comparable amount of valuations within the selected threshold of 15%. This finding suggests that the underlying valuation technique, at least with respect to DCF and GIA, is not able to explain the observed smoothness of German valuation-based indices. Future research should focus on a country comparison of valuation accuracy in order to put the results of this study into perspective.","PeriodicalId":45726,"journal":{"name":"Journal of Property Research","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2020-05-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/09599916.2020.1758754","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46142244","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-04-09DOI: 10.1080/09599916.2020.1740765
K. Goodwin, C. La Roche, B. Waller
ABSTRACT Common-interest developments (CIDs) or planned urban developments (PUDs) can include a multitude of property types such as condos, townhomes, coops and single-family residences. Many such developments are privately governed by a homeowners’ association (HOA) and managed by an HOA board of directors comprised of community homeowners. While such communities and their governing bodies have been widely criticised for their onerous rules, regulations and exclusionary practices, many argue that the amenities, benefits and utility afforded to its members provide a large degree of satisfaction for homeowners. In fact, one of the purposes of an HOA is to preserve and enhance home values by creating an environment with minimal negative externalities. Although it is generally assumed that an HOA does add value, these associations have also generated a number of controversial disputes. This paper examines the effects of an HOA on marketability to empirically shed light on the question of whether buyers find HOAs to be beneficial or burdensome. The results show that the impact of the HOA on price, marketing time and probability of sale are not even across price segments and exist even after controlling for the presence of gated communities.
{"title":"Restrictions versus amenities: the differential impact of home owners associations on property marketability","authors":"K. Goodwin, C. La Roche, B. Waller","doi":"10.1080/09599916.2020.1740765","DOIUrl":"https://doi.org/10.1080/09599916.2020.1740765","url":null,"abstract":"ABSTRACT Common-interest developments (CIDs) or planned urban developments (PUDs) can include a multitude of property types such as condos, townhomes, coops and single-family residences. Many such developments are privately governed by a homeowners’ association (HOA) and managed by an HOA board of directors comprised of community homeowners. While such communities and their governing bodies have been widely criticised for their onerous rules, regulations and exclusionary practices, many argue that the amenities, benefits and utility afforded to its members provide a large degree of satisfaction for homeowners. In fact, one of the purposes of an HOA is to preserve and enhance home values by creating an environment with minimal negative externalities. Although it is generally assumed that an HOA does add value, these associations have also generated a number of controversial disputes. This paper examines the effects of an HOA on marketability to empirically shed light on the question of whether buyers find HOAs to be beneficial or burdensome. The results show that the impact of the HOA on price, marketing time and probability of sale are not even across price segments and exist even after controlling for the presence of gated communities.","PeriodicalId":45726,"journal":{"name":"Journal of Property Research","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2020-04-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/09599916.2020.1740765","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48255635","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-04-02DOI: 10.1080/09599916.2020.1748691
Chris Ratcliffe, B. Dimovski, M. Keneley, S. Salzman
ABSTRACT When a Real Estate Investment Trust (REIT) decides to become a publicly listed entity, they are faced with a choice with regard to providing a dividend forecast in their prospectus. To date, there have been limited studies on the relationship between post-listing performance and disclosure choice. This study finds that the choice of disclosure has an important impact on REIT post-listing performance. Theoretical research argues that not all value uncertainty is resolved prior to the initial public offering (IPO) and ambiguous information quality can have long-term negative impacts on share prices. We examine the information content in the prospectuses of 114 US Equity REITs in regard to their dividend forecast between 1996 and 2017. We observe significant post-listing underperformance over the 3-, 6-, 9-and 12-month event windows for REITs that provide no dividend forecasts in their prospectus. These results suggest that the lack of distribution information has a long-term negative impact on newly listed REITs. This research has implications for both managers and investors’ portfolio choices.
{"title":"Dividend disclosure and post-performance of REIT IPOs","authors":"Chris Ratcliffe, B. Dimovski, M. Keneley, S. Salzman","doi":"10.1080/09599916.2020.1748691","DOIUrl":"https://doi.org/10.1080/09599916.2020.1748691","url":null,"abstract":"ABSTRACT When a Real Estate Investment Trust (REIT) decides to become a publicly listed entity, they are faced with a choice with regard to providing a dividend forecast in their prospectus. To date, there have been limited studies on the relationship between post-listing performance and disclosure choice. This study finds that the choice of disclosure has an important impact on REIT post-listing performance. Theoretical research argues that not all value uncertainty is resolved prior to the initial public offering (IPO) and ambiguous information quality can have long-term negative impacts on share prices. We examine the information content in the prospectuses of 114 US Equity REITs in regard to their dividend forecast between 1996 and 2017. We observe significant post-listing underperformance over the 3-, 6-, 9-and 12-month event windows for REITs that provide no dividend forecasts in their prospectus. These results suggest that the lack of distribution information has a long-term negative impact on newly listed REITs. This research has implications for both managers and investors’ portfolio choices.","PeriodicalId":45726,"journal":{"name":"Journal of Property Research","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2020-04-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/09599916.2020.1748691","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44123842","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-02-05DOI: 10.1080/09599916.2020.1720784
P. Mcallister, I. Nase
ABSTRACT This study updates and expands upon the existing work on the accuracy of the IPF’s Consensus Forecasts. The paper evaluates the extent to which the consensus forecasts were able to predict the relative performance. It also assesses the accuracy of implied yield forecasts and concludes that failure in yield forecasting is the main source of failure in forecasts of capital growth and total returns. A high level of agreement between the actual and forecasted sector rankings was found. Evidence of a pessimism bias was identified. Yield forecasts are consistently found to perform worst using a range of forecast performance metrics.
{"title":"The accuracy of consensus real estate forecasts revisited","authors":"P. Mcallister, I. Nase","doi":"10.1080/09599916.2020.1720784","DOIUrl":"https://doi.org/10.1080/09599916.2020.1720784","url":null,"abstract":"ABSTRACT This study updates and expands upon the existing work on the accuracy of the IPF’s Consensus Forecasts. The paper evaluates the extent to which the consensus forecasts were able to predict the relative performance. It also assesses the accuracy of implied yield forecasts and concludes that failure in yield forecasting is the main source of failure in forecasts of capital growth and total returns. A high level of agreement between the actual and forecasted sector rankings was found. Evidence of a pessimism bias was identified. Yield forecasts are consistently found to perform worst using a range of forecast performance metrics.","PeriodicalId":45726,"journal":{"name":"Journal of Property Research","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2020-02-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/09599916.2020.1720784","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42901483","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-02-04DOI: 10.1080/09599916.2020.1720269
N. Crosby, Steven Devaney, P. Wyatt
ABSTRACT Real estate development has received less scrutiny than real estate investment in terms of appraisal practices and performance measurement. This is despite the inherent uncertainty and financial risks associated with development as an activity. We investigate market practices regarding performance metrics and return expectations both for residential and commercial real estate development in the UK, exploring what is considered as an appropriate return and how this varies according to type and duration of scheme, and method of appraisal used. After examining the literature and the information available on ex-post returns from development activity, results from a survey of real estate developers are reported, supplemented by findings from interviews. The results suggest that the use of traditional residual valuation techniques dominates discounted cash flow models when appraising development projects, particularly among residential developers, while profit-on-cost and profit-on-value are the most popular metrics for quantifying required returns. Unlike NPV or IRR, these metrics do not account for the timing of cash flows, raising questions about the robustness of appraisals in this sector. Such metrics might suffice if required profits are adjusted in ways that are consistent with scheme duration and risks, but it is unclear that this is currently the case.
{"title":"Performance metrics and required returns for UK real estate development schemes","authors":"N. Crosby, Steven Devaney, P. Wyatt","doi":"10.1080/09599916.2020.1720269","DOIUrl":"https://doi.org/10.1080/09599916.2020.1720269","url":null,"abstract":"ABSTRACT Real estate development has received less scrutiny than real estate investment in terms of appraisal practices and performance measurement. This is despite the inherent uncertainty and financial risks associated with development as an activity. We investigate market practices regarding performance metrics and return expectations both for residential and commercial real estate development in the UK, exploring what is considered as an appropriate return and how this varies according to type and duration of scheme, and method of appraisal used. After examining the literature and the information available on ex-post returns from development activity, results from a survey of real estate developers are reported, supplemented by findings from interviews. The results suggest that the use of traditional residual valuation techniques dominates discounted cash flow models when appraising development projects, particularly among residential developers, while profit-on-cost and profit-on-value are the most popular metrics for quantifying required returns. Unlike NPV or IRR, these metrics do not account for the timing of cash flows, raising questions about the robustness of appraisals in this sector. Such metrics might suffice if required profits are adjusted in ways that are consistent with scheme duration and risks, but it is unclear that this is currently the case.","PeriodicalId":45726,"journal":{"name":"Journal of Property Research","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2020-02-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/09599916.2020.1720269","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49207831","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-01-28DOI: 10.1080/09599916.2020.1714698
M. Beenstock, Daniel Feldman, D. Felsenstein
ABSTRACT A new empirical approach to identify local housing markets (LHM’s) is proposed, which focuses on the spatial correlation between local house price indices constructed from repeat sales data. It extends the work of Pryce who claimed that if housing in different locations are perfect substitutes, their house price indices should be perfectly correlated over time. Pryce’s work represents a paradigmatic change in identifying local housing markets using revealed preferences rather than hedonic pricing. It requires spatial panel data for house prices which we construct using repeated sales data to generate house price indices for Tel Aviv (1998–2014) for over 100 census tracts. These price indices are used to define LHMs. The number of LHMs varies inversely with the degree to which house prices in locations belonging to the same LHM, are expected to be correlated. It also varies directly with the order of contiguity of these locations. Results point to considerable spatial heterogeneity in house price movement. This belies the popular impression that the Tel Aviv housing market is relatively homogeneous, characterised by expensive housing and uniform house price movements.
{"title":"Identifying local housing markets through revealed preference","authors":"M. Beenstock, Daniel Feldman, D. Felsenstein","doi":"10.1080/09599916.2020.1714698","DOIUrl":"https://doi.org/10.1080/09599916.2020.1714698","url":null,"abstract":"ABSTRACT A new empirical approach to identify local housing markets (LHM’s) is proposed, which focuses on the spatial correlation between local house price indices constructed from repeat sales data. It extends the work of Pryce who claimed that if housing in different locations are perfect substitutes, their house price indices should be perfectly correlated over time. Pryce’s work represents a paradigmatic change in identifying local housing markets using revealed preferences rather than hedonic pricing. It requires spatial panel data for house prices which we construct using repeated sales data to generate house price indices for Tel Aviv (1998–2014) for over 100 census tracts. These price indices are used to define LHMs. The number of LHMs varies inversely with the degree to which house prices in locations belonging to the same LHM, are expected to be correlated. It also varies directly with the order of contiguity of these locations. Results point to considerable spatial heterogeneity in house price movement. This belies the popular impression that the Tel Aviv housing market is relatively homogeneous, characterised by expensive housing and uniform house price movements.","PeriodicalId":45726,"journal":{"name":"Journal of Property Research","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2020-01-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/09599916.2020.1714698","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45401131","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-01-02DOI: 10.1080/09599916.2020.1713859
Jyoti M. Rao, N. Hutchison, P. Tiwari
ABSTRACT Compulsory acquisition of land is contested bitterly by affected landowners for various reasons including fairness in the compensation that is offered to landowners and fairness in the process that is followed in land acquisition by acquiring authorities. While there is a volume of research that has focussed on compensation, there is a paucity of literature analysing fairness in the process of land acquisition. This paper examines fairness in land acquisition using the case of Scotland, which is currently in the process of reforming laws and policies governing the compulsory acquisition of land. A primary survey was undertaken with stakeholders involved in a road project and information was analysed using ‘qualitative content analysis’. This research identifies the gaps in the existing process of compulsory acquisition using the theoretical lens of ‘procedural justice’ with a strong focus on the social psychology dimension and argues for the incorporation of basic principles of ‘procedural justice’. Fifteen major procedural gaps were identified, which include weak decision-making power of the members of the public in the identification and design of public projects; inadequate representation of objectors due to the high personal cost associated with representation in a public inquiry; time delays; information asymmetries and inefficient grievance management.
{"title":"Analysing the process of compulsory acquisition of land through the lens of procedural fairness: evidence from Scotland","authors":"Jyoti M. Rao, N. Hutchison, P. Tiwari","doi":"10.1080/09599916.2020.1713859","DOIUrl":"https://doi.org/10.1080/09599916.2020.1713859","url":null,"abstract":"ABSTRACT Compulsory acquisition of land is contested bitterly by affected landowners for various reasons including fairness in the compensation that is offered to landowners and fairness in the process that is followed in land acquisition by acquiring authorities. While there is a volume of research that has focussed on compensation, there is a paucity of literature analysing fairness in the process of land acquisition. This paper examines fairness in land acquisition using the case of Scotland, which is currently in the process of reforming laws and policies governing the compulsory acquisition of land. A primary survey was undertaken with stakeholders involved in a road project and information was analysed using ‘qualitative content analysis’. This research identifies the gaps in the existing process of compulsory acquisition using the theoretical lens of ‘procedural justice’ with a strong focus on the social psychology dimension and argues for the incorporation of basic principles of ‘procedural justice’. Fifteen major procedural gaps were identified, which include weak decision-making power of the members of the public in the identification and design of public projects; inadequate representation of objectors due to the high personal cost associated with representation in a public inquiry; time delays; information asymmetries and inefficient grievance management.","PeriodicalId":45726,"journal":{"name":"Journal of Property Research","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2020-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/09599916.2020.1713859","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47475668","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-01-02DOI: 10.1080/09599916.2020.1713858
D. Levy, Catherine Frethey-Bentham, W. Cheung
ABSTRACT Buying a home may typically be the biggest lifetime purchase of any individual. People looking to purchase a home are bombarded with messages relating to the housing market every day and the framing of these messages has the potential to affect their purchase decisions. To examine these effects, an experiment was carried out with 620 participants who were divided into four groups, each presented with a different message scenario reflecting market familiarity and positive and negative framing. The findings indicate that framing effects are asymmetric in nature and could serve to prolong a housing market downturn within a property cycle. Pessimistic framing was found to lead homebuyers to perceive a more substantial decrease in housing prices, as compared to an optimistic framing which exhibited a significantly lesser increase. The study also suggests that such asymmetry is mitigated when individuals are more familiar with a market. The paper considers the implications of such framing by analysing residential property market data and demonstrates the existence of such asymmetric behaviour and how the market familiarity mitigates such behaviour.
{"title":"Asymmetric framing effects and market familiarity: experimental evidence from the real estate market","authors":"D. Levy, Catherine Frethey-Bentham, W. Cheung","doi":"10.1080/09599916.2020.1713858","DOIUrl":"https://doi.org/10.1080/09599916.2020.1713858","url":null,"abstract":"ABSTRACT Buying a home may typically be the biggest lifetime purchase of any individual. People looking to purchase a home are bombarded with messages relating to the housing market every day and the framing of these messages has the potential to affect their purchase decisions. To examine these effects, an experiment was carried out with 620 participants who were divided into four groups, each presented with a different message scenario reflecting market familiarity and positive and negative framing. The findings indicate that framing effects are asymmetric in nature and could serve to prolong a housing market downturn within a property cycle. Pessimistic framing was found to lead homebuyers to perceive a more substantial decrease in housing prices, as compared to an optimistic framing which exhibited a significantly lesser increase. The study also suggests that such asymmetry is mitigated when individuals are more familiar with a market. The paper considers the implications of such framing by analysing residential property market data and demonstrates the existence of such asymmetric behaviour and how the market familiarity mitigates such behaviour.","PeriodicalId":45726,"journal":{"name":"Journal of Property Research","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2020-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/09599916.2020.1713858","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48260106","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-01-02DOI: 10.1080/09599916.2019.1693418
Jian Zhou
ABSTRACT Recent advances in financial econometrics have led to the development of a variety of estimators of asset volatility using frequently sampled price data, known as ‘realised measures’. These estimators rely on different assumptions and take many different functional forms. In this paper, we aim to examine the accuracy of these estimators in the measurement of daily volatility of REIT returns. We consider a wide range of commonly used realised measures and apply them to several major global REIT markets. Our findings suggest that there is no single estimator which can perform the best for all markets under study. The best-performing estimator varies across markets. We obtain our results by considering the accuracy of both volatility estimation and forecast and by using multiple robust evaluation metrics.
{"title":"A comparison of realised measures for daily REIT volatility","authors":"Jian Zhou","doi":"10.1080/09599916.2019.1693418","DOIUrl":"https://doi.org/10.1080/09599916.2019.1693418","url":null,"abstract":"ABSTRACT Recent advances in financial econometrics have led to the development of a variety of estimators of asset volatility using frequently sampled price data, known as ‘realised measures’. These estimators rely on different assumptions and take many different functional forms. In this paper, we aim to examine the accuracy of these estimators in the measurement of daily volatility of REIT returns. We consider a wide range of commonly used realised measures and apply them to several major global REIT markets. Our findings suggest that there is no single estimator which can perform the best for all markets under study. The best-performing estimator varies across markets. We obtain our results by considering the accuracy of both volatility estimation and forecast and by using multiple robust evaluation metrics.","PeriodicalId":45726,"journal":{"name":"Journal of Property Research","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2020-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/09599916.2019.1693418","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44191283","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-12-04DOI: 10.1080/09599916.2019.1697345
M. McCord, D. Lo, P. Davis, Lesley Hemphill, J. McCord, M. Haran
ABSTRACT Energy performance remains a debated topic in real estate, particularly with reference to the capitalisation effect with property value. An emerging corpus of research studies have investigated the relationship between energy performance characteristics and the role of Energy Performance Certificates. Whilst these studies have consistently demonstrated that a pricing effect exists, some recent studies have shown that Energy Performance Certificates (EPCs) are more complex and inconclusive, particularly when accounting for data limitations and changing model specifications. Moreover, a majority of these studies neglect to adequately account for absolute location and therefore, arguably, do not examine the geographic variation between EPCs and property value across the housing market setting. This study presents one of the first spatial analyses of EPCs using transactions for the Belfast Metropolitan Area. In evaluating whether spatial effects exist between EPCs and house prices, a number of spatial tests are performed and a series of models are developed to account for spatial dependency and determine whether there are any spatially correlating effects. The findings indicate that EPCs comprise a partial effect on house prices, and importantly, there are pricing differentials in the spatial variation in EPCs with the pricing effects conforming to both spatial clustering and randomness.
{"title":"A spatial analysis of EPCs in The Belfast Metropolitan Area housing market","authors":"M. McCord, D. Lo, P. Davis, Lesley Hemphill, J. McCord, M. Haran","doi":"10.1080/09599916.2019.1697345","DOIUrl":"https://doi.org/10.1080/09599916.2019.1697345","url":null,"abstract":"ABSTRACT Energy performance remains a debated topic in real estate, particularly with reference to the capitalisation effect with property value. An emerging corpus of research studies have investigated the relationship between energy performance characteristics and the role of Energy Performance Certificates. Whilst these studies have consistently demonstrated that a pricing effect exists, some recent studies have shown that Energy Performance Certificates (EPCs) are more complex and inconclusive, particularly when accounting for data limitations and changing model specifications. Moreover, a majority of these studies neglect to adequately account for absolute location and therefore, arguably, do not examine the geographic variation between EPCs and property value across the housing market setting. This study presents one of the first spatial analyses of EPCs using transactions for the Belfast Metropolitan Area. In evaluating whether spatial effects exist between EPCs and house prices, a number of spatial tests are performed and a series of models are developed to account for spatial dependency and determine whether there are any spatially correlating effects. The findings indicate that EPCs comprise a partial effect on house prices, and importantly, there are pricing differentials in the spatial variation in EPCs with the pricing effects conforming to both spatial clustering and randomness.","PeriodicalId":45726,"journal":{"name":"Journal of Property Research","volume":null,"pages":null},"PeriodicalIF":1.9,"publicationDate":"2019-12-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1080/09599916.2019.1697345","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43866905","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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