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Paper eres2003_174:
The Construction of a Real Estate Confidence Index for the German Real Estate Market

id eres2003_174
authors Holzmann, Christoph
year 2003
title The Construction of a Real Estate Confidence Index for the German Real Estate Market
source 10th European Real Estate Society Conference (10-13 June 2003) Helsinki, Finland
summary Already in the first half of the past century, cycle researchers found that expectations played a major role in the formation of business cycles. Based on this understanding, institutions in all industrialized countries developed business cycle surveys in order to identify the expecta-tions of market participants and to derive business cycle indicators from these data. Since most of the resulting indicators relate to the economy as a whole and since there is only a loose rela-tionship between the business cycle of the economy as a whole and the business cycle at an industry or company level, they are of limited value to decision makers in individual industries such as real estate. Only recently, researchers especially from the United States have started to construct real estate confidence indices for the projection of the real estate business cycle. The paper analyses the potential of constructing a real estate confidence index for the German real estate market as a new tool to forecast the real estate business cycle. International real estate related confidence indices are analysed and compared to proven sentiment indicators from other industries. Based on the findings of this analysis, an individual real estate confidence index approach is derived for the German real estate market. Finally, the paper provides a first frame-work for the implementation of this new approach and highlights its strengths and weaknesses.
keywords Leading business cycle indicator; qualitative indicator; composite indicator; real estate confidence index; forecasting; German real estate market
series ERES:conference
email christoph.holzmann@gmx.net
discussion No discussions. Post discussion ...
ratings
session Session 11, Modelling & forecasting methods
last changed 2008/12/29 19:09
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