scholarly journals A FUZZY KNOWLEDGE-BASED FRAMEWORK FOR RISK ASSESSMENT OF RESIDENTIAL REAL ESTATE INVESTMENTS

2017 ◽  
Vol 23 (1) ◽  
pp. 140-156 ◽  
Author(s):  
Mónica I. F. RIBEIRO ◽  
Fernando A. F. FERREIRA ◽  
Marjan S. JALALI ◽  
Ieva MEIDUTĖ-KAVALIAUSKIENĖ
Keyword(s):  
Risk Assessment ◽  
Risk Analysis ◽  
Real Estate ◽  
Cognitive Mapping ◽  
Reference Model ◽  
Fuzzy Model ◽  
Careful Analysis ◽  
Residential Real Estate ◽  
Real Estate Investments ◽  
Residential Properties

Risk analysis of residential real estate investments requires careful analysis of certain variables (or determinants). Because real estate is a key sector for economic and social development, this risk analysis is seen as critical in supporting decision processes relating to buying or selling residential properties, partly due to the pressures caused by the current economic environment. This study aims to develop a conceptual reference model for risk assessment of residential real estate using fuzzy cognitive mapping. This fuzzy model allows cause-and-effect relationships between determinants to be identified and better understood, which in turn allows for better informed investment decisions. The results show that the use of cognitive maps reduces the number of omitted criteria and favors learning with regard to how the criteria relate to each other, holding great potential and versatility in structuring complex decision problems. Practical implications, strengths and weaknesses of our proposal are discussed.

scholarly journals International Real Estate Review

2010 ◽  
Vol 13 (1) ◽  
pp. 1-29
Author(s):  
Sam K. Hui ◽  
◽  
Alvin Cheung ◽  
Jimmy Pang ◽  
◽  
...  
Keyword(s):  
Hong Kong ◽  
Real Estate ◽  
Statistical Method ◽  
Bayesian Approach ◽  
Investment Decisions ◽  
Average Price ◽  
Residential Real Estate ◽  
Property Market ◽  
Residential Properties ◽  
Expert Assessments

We have developed a statistical method for the valuation of residential properties using a hierarchical Bayesian approach, which takes into consideration the unique structure of the Hong Kong property market. Our model is calibrated on a dataset that covers all residential real estate transactions in ten major Hong Kong residential complexes from February 2008 to February 2009. Although parsimonious, our model outperforms other valuation methods that are based on average price-per-square- feet or expert assessments. By providing our model-based valuations online without charge, we hope to improve transparency in the Hong Kong housing market, thus enabling consumers to make better investment decisions.

The Role of Profit, Law, and Ethics in Residential Real Estate Investments

2009 ◽  
Vol 12 (2) ◽  
pp. 157-171
Author(s):  
Michael Seiler ◽  
Vicky Seiler ◽  
David Harrison ◽  
Kimberly Luchtenberg
Keyword(s):  
Real Estate ◽  
Residential Real Estate ◽  
Law And Ethics ◽  
Real Estate Investments

scholarly journals Efficient Use of Capital: Paradox of Real Estate and Industry in Turkey

2017 ◽  
Vol 9 (8) ◽  
pp. 221
Author(s):  
Ali Hepsen ◽  
Mehmet Asici ◽  
Olgun Aydin
Keyword(s):  
Economic Growth ◽  
Resource Allocation ◽  
Real Estate ◽  
Private Sector ◽  
Fixed Capital ◽  
Capital Expenditures ◽  
Residential Real Estate ◽  
Turkish Economy ◽  
Real Estate Investments ◽  
Industry Sectors

In recent years, one of the hottest debates on Turkish economy is the conflict on resource allocation between real estate and industry sectors. The debate was so intense that ex-minister of Economy Mr. Ali Babacan declared his opinions. Mr. Babacan’s statements about the creation of fixed capital by the private sector is not promising, and private sector fixed capital expenditures are not in the desired level. This situation is due to the limited economic growth and future economic growth. In this study, we have investigated whether Mr. Babacan’s statement is right or not. We have discussed the reliability of the measurement of real estate output as Gruneberg and Folwell did in 2013 and Ruddock did in 2002. That could be concluded that we agree with ex-minister of Economy Mr. Babacan’s comments regarding to imbalances among sectors are threatening Turkish economy’s stability. The imbalances are favoring residential real estate investments and consequently the country is exposed to currency risk.

Estimation of Risk-Return for Real Estate Investments by Applying Ellwood’s Model and Real Options Analysis: An Application to the Residential Real Estate Market of Naples

2014 ◽  
Vol 651-653 ◽  
pp. 1570-1575 ◽  
Author(s):  
Vincenzo del Giudice ◽  
Alfredo Passeri ◽  
Pierfrancesco de Paola ◽  
Francesca Torrieri
Keyword(s):  
Real Estate ◽  
Real Options ◽  
Financial Analysis ◽  
Real Estate Market ◽  
Residential Real Estate ◽  
Real Options Analysis ◽  
Risk Return ◽  
Real Estate Investments ◽  
Capitalization Rate ◽  
Financial Income

In the present study was developed an application of a model derived from Ellwood’s financial analysis and Real Options Analysis for estimating the risk-return in the residential real estate market of Naples. With the aim of reducing the uncertainty related to the determination of the risk and return for an property investment, starting of real estate investment layout derived from the Ellwood’s model, latter defined by financial income and costs related to the period of property availability, a risk analysis with Real Options Analysis has been implemented, in order to obtain the evolution of the investment value until the year in which it is convenient to recover the initial capital. This model has allowed to determine a capitalization rate for a general area of reference, that it can adapt on further effects of specific factors and intrinsic characteristics of the property being valued. It also allows to define uniquely the investment duration, in terms of availability period of property.

scholarly journals IDENTIFYING KEY DETERMINANTS OF HOUSING SALES AND TIME-ON-THE-MARKET (TOM) USING FUZZY COGNITIVE MAPPING

2015 ◽  
Vol 19 (3) ◽  
pp. 235-244 ◽  
Author(s):  
Fernando A. F. FERREIRA ◽  
Marjan S. JALALI
Keyword(s):  
Real Estate ◽  
Cognitive Mapping ◽  
Cognitive Maps ◽  
Fuzzy Cognitive Maps ◽  
Residential Real Estate ◽  
Residential Housing ◽  
Fuzzy Cognitive Mapping ◽  
Time On The Market ◽  
Home Sales ◽  
Housing Attributes

Price and residential housing attributes have long been identified as key determinants of home sales and, as such, they can explain time-on-the-market (TOM). It is acknowledged, however, that there are other factors (or determinants) that influence home sales and TOM, which are of great importance but seldom taken into account in the appraisal process of residential real estate. Based on the use of fuzzy cognitive mapping, we propose a framework that adds value to the way that key determinants of housing sales and TOM are identified. This framework is the result of a process involving several residential real estate experts (i.e.appraisers and realtors), and follows a constructivist approach. Our findings suggest that the use of fuzzy cognitive maps (FCMs) allows the number of omitted determinants to be reduced and the understanding of the relationships between them to be improved. The strengths and weaknesses of our methodological framework are also discussed.

scholarly journals FOR SALE… BUT FOR HOW LONG? A METHODOLOGICAL PROPOSAL FOR ESTIMATING TIME-ON-THE-MARKET

2015 ◽  
Vol 19 (4) ◽  
pp. 309-324 ◽  
Author(s):  
Vanda C. S. MARTINS ◽  
Marlene N. M. FILIPE ◽  
Fernando A. F. FERREIRA ◽  
Marjan S. JALALI ◽  
Nelson J. S. ANTÓNIO
Keyword(s):  
Real Estate ◽  
Evaluation System ◽  
Socioeconomic Development ◽  
Cognitive Mapping ◽  
Real Estate Market ◽  
Residential Real Estate ◽  
Analytic Hierarchy ◽  
The Real Estate ◽  
Time On The Market ◽  
Measurement Framework

Residential real estate assumes crucial importance in a country's socioeconomic development. It is an important field of study, and much work has gone into better understanding the sector and the factors determining sales within it, such as time-on-the-market (TOM). TOM can be influenced by a variety of elements; a fact that in effect raises a lot of issues, because these determinants are often interpreted in an ambiguous or unstructured way. This study aims to bring greater accuracy and structure to our understanding of these factors, by showing that the integrated use of cognitive mapping with the Analytic Hierarchy Process (AHP) can give rise to a conceptually coherent and empirically valid framework to calculate TOM indices in the residential real estate market. Because it takes into account both tangible and intangible characteristics of a house, this measurement framework also boosts strategic planning support and allows for more informed business planning, which we believe can be a real contribution to the development of the real estate market. The practical implications and limitations of this evaluation system are also discussed.

scholarly journals Application of the Beta Coefficient in the Market of Direct residential Real Estate Investments

2014 ◽  
Vol 22 (2) ◽  
pp. 13-21 ◽  
Author(s):  
Rafał Wolski
Keyword(s):  
Real Estate ◽  
Real Estate Market ◽  
Formal Structure ◽  
Residential Real Estate ◽  
The Real Estate ◽  
Real Estate Investments ◽  
Beta Coefficient ◽  
Capm Model ◽  
The One ◽  
The Cost

Abstract The beta coefficient is one of the most popular indices used in contemporary finances. Despite the fact that there are justified doubts connected with its application, it is currently difficult to imagine a situation in which the cost of capital would be calculated without the use of the CAPM model. Thus, an attempt at answering the question whether and to what degree beta may be used in the real estate market constitutes an interesting problem. This is because on the one hand, the formal structure suggests that beta should not be used for assets which are not included in the benchmark but, on the other hand, such a benchmark should, at least theoretically, contain all market assets. Therefore, a decision was made to have a closer look at this issue, with the analysis of the possibility of using the beta coefficient in the residential real estate market set as the objective. Using the database of prices in the direct real estate investment created by the NBP, a comparison was conducted with regard to features of undertaken investments on the basis of an analysis of systematic risk calculated using selected indices available on the Polish market.

Performance of commercial and residential real estate investments in Ibadan property market, Nigeria

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Olatoye Ojo ◽  
Daniel Ibrahim Dabara ◽  
Michael Tolulope Adeyemi Ajayi
Keyword(s):  
Real Estate ◽  
Causal Relationship ◽  
Investment Decisions ◽  
Least Square ◽  
Residential Real Estate ◽  
Property Market ◽  
Content Type ◽  
Holding Period ◽  
Real Estate Investments ◽  
Inflation Hedging

PurposeThis study examined the performance of commercial and residential real estate investments in the Ibadan property market to provide information for investment decisions.Design/methodology/approachThe study used a mixed research design (qualitative and quantitative). Data were obtained employing in-depth interviews with randomly selected sixteen estate surveyors and valuers practising in the Ibadan property market. Data for the study were analysed using the phenomenological thematic content analysis. Similarly, data on rental and capital values were translated to income, capital and holding period returns. The Kwiatkowski–Phillips–Schmidt–Shin (KPSS) and Philip–Perron (PP) models were used for unit root analysis. Ordinary least square (OLS) regression model was used to test for inflation-hedging characteristics, and the Granger causality tests were carried out to analyse the causal relationship between the variables.FindingsThe study revealed that the Ibadan property market is still immature. For the return components, the study found that the Ibadan property market provided mean holding period returns of 10.82%, 14.31 and 8.29% for office, shop and residential property types, respectively. The study also revealed that the selected property types are perverse hedges against inflation. Similarly, the study showed a unidirectional causal relationship between inflation and returns on the selected property types.Practical implicationsResults of this study revealed the peculiar nature of the Ibadan property market; findings from the survey can be used as a guide for investment decisions by foreign and domestic investors. Shrewd investors can take advantage of the high returns provided by the real estate assets in the Ibadan property market (by investing in the property market) to obtain high returns and expand their investment portfolio.Originality/valueThis study is the first to examine, in an eclectic and comparative context, the performance of commercial and residential properties in the Ibadan property market from the perspective of its market maturity level, returns profile, as well as its inflation-hedging characteristics. Findings from the study will equip both individual and institutional investors with valuable information for investment decisions.

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