Real Estate Market Transparency Research Articles

On real estate market transparency: The relationship with ICT trade and investment

The relationship between information and communication technology (ICT) investment, ICT trade, and real estate market transparency is examined in this paper. National-level bi-annual data from a sample of advanced and emerging market economies for the period 2004–2018 underpins this work. The regression analyses suggest greater levels of capital investment in ICT and ICT trade are associated with increased transparency in the real estate market. The effect is more pronounced in emerging economies than in advanced ones. Real estate market transparency is also higher in contexts having less restrictions on foreign real estate investment, coupled with corruption controls. These findings also align with existing literature inferring that countries with common law traditions are often more transparent than those from civil law origins.

The increasing importance of environmental sustainability in global real estate investment markets

PurposeWithin the context of ESG (Environment, Social and Governance), environmental sustainability has taken on increased global importance in recent years. Similarly, real estate investment managers in developing their global real estate investment portfolios need a fuller understanding of the ESG and environmental sustainability dimensions of these global real estate markets for more informed real estate investment decisions. Using the JLL GRETI sustainability sub-index, this paper examines the environmental sustainability transparency status of 99 global real estate markets over 2016–2020 and explores various strategic issues regarding ESG and environmental sustainability; particularly the critical issues relating to climate risk mitigation, climate resilience and zero-carbon. The current status of environmental sustainability in these 99 real estate markets is assessed, with areas for “best practice” improvement identified to the benefit of real estate investment managers; particularly the improvements needed in ESG to support real estate investment in the emerging real estate markets.Design/methodology/approachThe JLL GRETI sustainability sub-index is analysed to examine strategic issues relating to environmental sustainability transparency. 99 real estate markets are assessed globally for a range of critical ESG issues over 2016–2020. Differences between the developed and emerging real estate markets are highlighted.FindingsConsiderable variation was seen in the ESG and environmental sustainability practices, procedures and frameworks across these 99 real estate markets. This was particularly evident amongst the emerging real estate markets. Compared to the other five dimensions for real estate market transparency, environmental sustainability was seen to be well behind these other dimensions in most markets. Progress has been made in recent years, but it has been slow and steady rather than at a dynamic level. Clearly, more is needed globally to enhance the stature of environmental sustainability in the context of an increasing focus on ESG and specifically on climate risk mitigation, climate resilience and zero-carbon in real estate investment.Practical implicationsWith ESG and environmental sustainability taking on increased importance across the international real estate markets, it is important that real estate fund managers have a full understanding of the ESG and environmental sustainability status of these real estate markets where they may be considering real estate investment opportunities; this includes both the developed and emerging real estate markets. This is essential to ensure future capital raising for new funds, as well as supporting the global ESG agenda by the real estate investment community. Specific strategies are also identified for emerging real estate markets to improve their environmental sustainability practices and ESG status.Originality/valueThis is the first paper to use the JLL GRETI sustainability sub-index to assess the environmental sustainability status of 99 real estate markets globally; providing strategic insights for real estate investment managers as they develop their global real estate portfolios and more fully embrace the challenges of ESG and environmental sustainability in the real estate space going forward. Specific strategies are clearly identified for all markets to improve their environmental sustainability ratings to the benefit of both global real estate investment and the broader communities.

Role of global standards: Rural and urban benefits of digital valuation

Global standards shape the convergence of digital valuation techniques, benefiting rural and urban areas. These standards provide uniformity, openness, and accuracy in property valuation across varied geographical and economic environments in an increasingly linked globe. Digital valuation norms revolutionise rural places. More efficient and accurate property assessments may improve land use planning, credit and finance access, and land tenure security in rural areas. This facilitates rural development by attracting investments, promoting sustainable agriculture, and expanding infrastructure. Global standards account for soil quality, irrigation potential, and market proximity to enable a rigorous and customised assessment procedure for rural properties. In cities, digital value norms provide similar advantages. To handle different property kinds, market dynamics, and complicated ownership arrangements, rapid urbanisation requires sophisticated valuation methodologies. Global standards simplify property tax assessments, fair urban planning, and local income collection. Accurate appraisals boost real estate market transparency, investor trust, and responsible urban development. This improves infrastructure, public services, and urban life. Global standards have an abstract influence on digital value beyond economics. These standards enable a single global ecosystem by encouraging cooperation and information sharing among governments, financial institutions, valuation experts, and technology vendors. This ecosystem fosters innovation by encouraging sophisticated valuation tools and procedures via common standards. Equity in valuation procedures also promotes social cohesiveness and inclusion between rural and urban areas. Global standards for digital valuation enable societies to maximise their real estate assets, promoting sustainable development, economic progress, and better living circumstances.

Improvement of the real estate transparency through digitalisation

Abstract Taking into account that the transparency is a quality of communication of sustainability information, as well as the role of digitalisation in ensuring the transparency, we proposed to study the perception of real estate entities related to promoting transparency in the relationship with stakeholders and the integration of information and communication technology in their business models. Applying a qualitative approach, we critically analysed the sustainability reports published by real estate companies from the EU, which represent important non-financial information sources for stakeholders. Transparency is mainly reflected in corporate governance, as real estate entities are increasingly concerned with maintaining open relationships with stakeholders and knowing their expectations to integrate them into the business strategy. We have noticed a broader approach of transparency in REIT entities and in reports that include an assurance statement. New digital technologies serve the purpose of improving transparency, which, although still poorly explored in real estate, offer new solutions to increase the efficiency and productivity of real estate activities. Property technology can improve real estate market transparency and liquidity, bringing lower transaction costs, which should positively impact the value of investment assets.

The impact of proptech on real estate industry growth

The real estate industry is currently undergoing a digital transformation that not only changes its nature in terms of the markets and work environments, but is also influencing its growth. What are the main trends and concerns related to this transformation? To what extent is the real estate industry already prepared for this? This paper reviews the situation in terms of the emergence of a phenomenon known as PropTech. PropTech is characterized by the massive implementation of emerging technology such as home matching tools, drones, virtual reality, building information modelling (BIM), data analytics tools, artificial intelligence (AI), Internet of Things (IoT) and blockchain, smart contracts, crowdfunding in the real estate sector, fintechs related to real estate, smart cities, regions, smart homes and shared economy. This survey of changes in the real estate industry due to PropTech covers four areas: (1) PropTech applications in the real estate industry; (2) implications of PropTech for real estate market transparency; (3) how PropTech could give a region or a company a competitive advantage; and (4) concerns on the wider implications of these changes on a labour market and education. In a plausible scenario, changing the real estate technologies could change system dynamics and improve real estate market transparency. Moreover, it can be asserted that, in a broader sense, PropTech is beneficial for territorial competition and territorial growth strategies. And lastly, under different institutional arrangements, PropTech can affect the changing structure of the real estate market, the demand for hi-tech, new skills as well as emerging policy challenges for the real estate industry.

Real estate market transparency and default on mortgages

This paper investigates the relationship between real estate market transparency (RET) and default on mortgages (DOM). Using data from 46 countries for the period of 2006–2016, we find evidence that there is a negative and significant relationship between RET and DOM. This result is robust with the inclusion of control variables and different estimation methods including panel fixed effects and generalized method of moments (GMM). We also find that the association between RET and DOM is more apparent in emerging economies than high-income countries.

The changing real estate market transparency in the European real estate markets

Purpose – Real estate market transparency is an important factor in real estate investment and occupier decision making. The purpose of this paper is to assess real estate transparency over 2004-2014 to determine whether the European real estate markets have become more transparent in a regional and global context. Design/methodology/approach – Using the JLL real estate transparency index over 2004-2014, changes in real estate market transparency are assessed for 102 real estate markets. This JLL real estate market transparency index is also assessed against corruption levels and business competitiveness in these markets. Findings – Improvements in real estate transparency are clearly evident in many European real estate markets, with several of these European real estate markets seen to be the major improvers in transparency from a global real estate markets perspective. Practical implications – Institutional investors and occupiers see real estate market transparency as a key factor in their strategic real estate investment and occupancy decision making. By assessing changes in real estate transparency across 102 real estate markets, investors and occupiers are able to make more informed real estate investment decisions across the global real estate markets. In particular, this relates to both investors and occupiers being able to more fully understand the risk dimensions of their international real estate decisions. Originality/value – This paper is the first paper to assess the dynamics of real estate market transparency over 2004-2014, with a particular focus on the 33 European real estate markets in a global context to facilitate more informed real estate investment and occupancy decision making.

The Official Real Estate Appraisal in Germany

The Real Estate Appraisal in Germany is regulated by the articles 192-199 of the German Construction Law. Technical guidelines, including the appraisal methods, are defined in bylaws. For the purpose of official real estate appraisal, Expert Appraisal Committees were founded in counties and large cities. The Committees are comprised of real estate experts doing a honorary service, coming from such professions as land surveying engineers, architects, civil engineers, Tax Office employees, experts from the banking sector, agronomists and real estate agents. The chairman of the Committee is also the director of the Cadastral Office and/or the Surveying Office. Every Committee has its own office within the Cadastral Office or the Surveying Office. The main task of the Committees is to establish and guarantee the transparency of the real estate market, by means of the publication of approximate plot value maps on the Internet as well as the publication of the reports on the real estate market. Apart from that, the Expert Appraisal Committees provide reports on the market value of real estate objects, available upon request. Reports on the market value of real estate objects are also made by publicly appointed and sworn experts. Based on the steady rise in the requests for superregional information about the real estate market in the recent years, the working group comprised of the representatives from the Expert Appraisal Committees from the whole country published its first report on the real estate market in Germany in 2008, and the second one in 2011.

Level of Foreign Direct Investments and Transparency of Polish and Global Real Estate Market

Abstract The article aimed to present the dependencies between the transparency of the real estate market and the level of foreign investments realized on it. For developers on the real estate market, a key element, other than potential profits, may be the market’s transparency. The main feature of a transparent real estate market is easy access to credible data concerning supply and demand, rent, property prices, transactions, vacant houses and capitalization rates that could be the basis for analysis. Market transparency does not guarantee the success of an investment, but considerably influences investment decisions and the level of risk connected with them.

PECULIARITIES OF PRIVATE HOUSES VALUATION BY SALES COMPARISON APPROACH

Sales comparison approach is the most often used approach in private houses valuation practice. This article discusses cases of sales comparison approach method application; its methodology as well as key factors to be considered in objective private houses valuation. Furthermore problem of not sufficient comparative sales prices in neighborhood is discussed emphasizing on its influence to appraised object value reliability. In order to avoid incorrect valuation basing on experience of the USA and other foreign countries some proposals for Lithuanian valuation methodology were given: to establish an exact number of comparative objects, to distinguish the key factors to be considered in every special private houses valuation case and to establish variance limits between appraised object value and comparative sales prices. In order to guarantee real estate market transparency professional appraisals organizations must be established to be responsible for real estate market research as well as analysis data and sales prices official announcements and other information spread tasks.