Research at the Division of Real Estate Economics and Finance
The Division’s research can be described both starting from the market being analyzed and from the theoretical area upon which the research is based. The research concerns the construction market (e g procurement issues), the market for property development (e g methods for market analysis), the market where properties are bought and sold (e g on pricing and property valuation) and the market for real estate management (such as what is done in-house what is purchased on the market). The research is based on both theories of Business administration and Economics. Issues of sustainable development are important in all of KTH's research areas, and in our research both environmental sustainability (e g in the form of several projects on green buildings) and social sustainability (e g studies on social capital in residential areas) are central.
Main issues in ongoing and recently completed projects can be exemplified by the following:
- Effects of different forms of procurement: How does the choice between design-bid-build, design-build and PPP (Public-Private Partnership) affect incentives for innovation and quality?
- Market Analysis: How could a developer capture customers' values in the early stages of a project and design projects so that they become more attractive?
- Social capital in residential areas: In several large cities, a comprehensive transformation from rental housing to condominium is taken place. Does the social capital affect the probability that a transformation can be implemented and how will the transformation affect social capital?
- Value concepts and methods of valuation: Is a third value concept needed in addition to market value and investment value? How should properties be valued during periods where there are large changes in turnover in the property market, and is the "correct" market value one where the turnover is kept constant? When it comes to valuation methods a key question is how to do valuations in a situation where the amount of available and up-to-date information is limited.
- Price index in the housing market: In order to follow the market and to create financial derivatives, a proper price index is needed. How, for example, should an index take into account that properties sold at a certain time may have different characteristics compared those sold at another date?
- Price bubbles in the property market: Here, the department has looked at how the controversial term of price bubble should be defined and how to assess whether a significant increase in prices indicates that there is a price bubble or not.
- Green buildings: The department's research focuses on profitability and customer satisfaction in environmentally friendly buildings both when it comes to new construction and renovation, in both office and residentials market. The methodological approach has included the use of so-called twin studies.
- Leases on the office market from an international perspective: Contract lengths, tenure and the responsibility of tenant and landlord differ considerably between countries and the question is how this affects the efficiency of the market.
- Regulations on the residential rental market: how to combine a 'reasonable' tenure security with a well-functioning market in the sense that there is a supply available in the market?