Numerous econometric models have been proposed for forecasting property market performance, but limited success has been achieved in finding a reliable and consistent model to predict property market movements over a five to ten year timeframe. This research focuses on office rental growth forecasts and overviews many of the office rent models that have evolved over the past 20 years. A model by DiPasquale and Wheaton is selected for testing in the Brisbane office market. The adaptation of this model did not provide explanatory variables that could assist in developing a reliable, predictive model of office rental growth. In light of this result, this paper suggests a system dynamics framework that includes an econometric model based on historical data as well as user input guidance for the primary variables. The rent forecast outputs would be assessed having regard to market expectations and probability profiling undertaken for use in simulation exercises.

No abstract