Efficiency in the UK Commercial Property Market: A Long-run Perspective

Arbeitspapier

Informationally efficient prices are a necessary requirement for optimal resource allocation in the real estate market. Prices are informationally efficient if they reflect buildings' benefit to marginal buyers, thereby taking account of all available information on future market development. Prices that do not reflect available information may lead to over- or undersupply if developers react to these inefficient prices. In this study, we examine the efficiency of the UK commercial property market and the interaction between prices, construction costs, and new supply. We collated a unique data set covering the years 1920 onwards, which we employ in our study. First, we assess if real estate prices were in accordance with present values, thereby testing for informational efficiency. By comparing prices and estimated present values, we can measure informational inefficiency. Second, we assess if developers reacted correctly to price signals. Development (or the lack thereof) should be triggered by deviations between present values and cost; if prices do not reflect present values, then they should have no impact on development decisions.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IWH Discussion Papers ; No. 15/2012

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Multiple or Simultaneous Equation Models: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models ; Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) ; Asset Pricing; Trading Volume; Bond Interest Rates
• Thema: asset pricing ; bubbles ; commercial property ; London ; real estate investment ; Preisbildung auf Vermögensmärkten ; Preisblasen auf Vermögensmärkten ; Gewerbeimmobilien ; London ; Bauinvestitionen ; Gewerbeimmobilien ; Immobilienpreis ; Informationseffizienz ; Immobilienmarkt ; Bauinvestition ; Großbritannien ; London

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Devaney, Steven ; Holtemöller, Oliver ; Schulz, Rainer
• Ereignis: Veröffentlichung
• (wer): Leibniz-Institut für Wirtschaftsforschung Halle (IWH)
• (wo): Halle (Saale)
• (wann): 2012

Weitere Informationen

• Handle: http://hdl.handle.net/10419/69613
• URN: urn:nbn:de:101:1-201302046640
• Letzte Aktualisierung: 10.03.2025, 11:45 MEZ