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Paper eres2011_32:
Explaining the Variation in Residential Capitalization Rates Worldwide: A Preliminary Investigation

id eres2011_32
authors Simons, Robert; Arbel, Yuval; Choi, Eugene; Shahar, Danny Ben
year 2011
title Explaining the Variation in Residential Capitalization Rates Worldwide: A Preliminary Investigation
source 18th Annual European Real Estate Society Conference in Eindhoven, the Netherlands
summary In an increasingly global investment climate, mobile capital interested in residential investment generally seeks the highest return on invested capital (cap rate). However, we observe a very large range in these values. Systematic differences may be explained by tax rates, demographics, regional factors, net migration, political structure and transition, homeownership rates, and other social and economic indicators. For this preliminary investigation, a set of data from Global Property Guide, an on-line investor-related service that has upper-end residential sales and rental information in over 100 countries, was augmented by World Bank data for 2010. A second data set by UN Habitat covers many less-affluent nations during a transitionary period in the world economy during the 1990s is also available. For 2010, factors related to national affluence, availability of credit, and transaction costs were associated with lower residential cap rates. In 1998, only regional dummy variables for politics are significant for developing countries.
keywords -
series ERES:conference
email r.simons@csuohio.edu
content file.pdf (178,033 bytes)
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ratings
session B5: International Markets
last changed 2014/10/21 21:51
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