Risk measures for direct real estate investments with non-normal or unknown return distributions

Lausberg, Carsten; Müller, Moritz; Oertel, Cay; Schultheiß, Tobias

doi:10.1365/s41056-019-00028-x

Cited by 10 publications

(5 citation statements)

References 59 publications

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“…Moreover, the financial dimensions of the investment, encompassing acquisition expenses, potential returns, and associated risks, significantly influence the land's worth [41][42][43] . Speculators engage in financial assessments, evaluating cash flow forecasts, prospective capital appreciation, and the timeframe for realizing investment returns [40,44] .…”

Section: Related Workmentioning

confidence: 99%

Unveiling and speculators in Addis Ababa: Insights, recommendations, and economic implications for sustainable development

Gemeda,

Cirella,

Abebe

et al. 2024

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<p>Land speculation poses a significant challenge in Ethiopia, particularly in urban and peri-urban areas where large acquisitions and land scarcity prevail. This study aims to discern land speculators in Addis Ababa by employing the motivation and scale method to optimize societal benefits. Employing a multi-sourced data approach and triangulation techniques, this research enhances data reliability. Primary data sourced from interviews, focus groups, and field surveys, supplemented by secondary data from various literature, spanning October 2021 to January 2023, forms the basis of the analysis. Results indicate that affluent individuals, brokers, bankers, and local government officials dominate land speculation activities in both urban core and periphery areas of Addis Ababa, perpetuating the unfair exclusion of lower-income groups from land ownership. To address this issue, three key recommendations are proposed: implementing a one-person, one-plot statute, imposing high property value taxes, and enforcing temporal restrictions on land development. Additionally, exploring the economic and business ramifications of these recommendations on investment patterns and market dynamics is crucial for ensuring their sustained effectiveness in fostering sustainable development.</p>

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Section: Related Workmentioning

confidence: 99%

Unveiling and speculators in Addis Ababa: Insights, recommendations, and economic implications for sustainable development

Gemeda,

Cirella,

Abebe

et al. 2024

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“…There is some consensus in financial theory that risk generally expresses the change in the return on the capital invested Δi C , which can be measured in different ways, such as volatility or maximum drawdown. This shall not be explored further here, for a detailed discussion of real estate risk measures see Lausberg et al (2020). Instead, it shall be shown that using the yield is also problematic.…”

Section: Indicators Of Riskmentioning

confidence: 99%

Rules for a coherent real estate risk scoring

Lausberg

Krieger

2020

JERER

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Purpose Scoring is a widely used, long-established, and universally applicable method of measuring risks, especially those that are difficult to quantify. Unfortunately, the scoring method is often misused in real estate practice and underestimated in academia. The purpose of this paper is to supplement the literature with general rules under which scoring systems should be designed and validated, so that they can become reliable risk instruments. Design/methodology/approach The paper combines the rules, or axioms, for coherent risk measures known from the literature with those for scoring instruments. The result is a system of rules that a risk scoring system should fulfil. The approach is theoretical, based on a literature survey and reasoning. Findings At first, the paper clarifies that a risk score should express the variation of a property’s yield and not of its quality, as it is often done in practice. Then the axioms for a coherent risk scoring are derived, e.g. the independence of the risk factors. Finally, the paper proposes procedures for valid and reliable risk scoring systems, e.g. the out-of-time validation. Practical implications Although it is a theoretical work, the paper also focuses on practical applicability. The findings are illustrated with examples of scoring systems. Originality/value Rules for risk measures and for scoring systems have been established long ago, but the combination is a first. In this way, the paper contributes to real estate risk research and risk management practice.

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“…Size, location, specifications, supply, interest rate, and availability of utilities such as swimming pools are all variables that influence land costs. Many variables influence land pricing, including location, neighbourhood, size, specifications, services supplied, market scenario, and so on (4). People nowadays require homes and land in order to secure their future as a long-term investment for their own usage and capital in the globe.…”

Section: Introductionmentioning

confidence: 99%

Expediency of Investments in Real Estate Sector

Jayanthi¹,

Saravanakumar²

2022

ECS Trans.

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In India, with the liberalization of the economy, the real estate industry has grown in prominence. As a result of the increasing business possibilities and labour migration, demand for commercial land property for both housing and industrial building has grown. The retail, hotel, and entertainment industries all have an impact on real estate developments. The research looks at the motivation, awareness, and profitability of retail real estate investors. The study design comprises descriptive research, in which various elements of real estate investments are studied. The demographic profile of real estate investors, motivation, and profitability in real estate investments were investigated in this study. A total of 314 samples were used in this investigation, and data was obtained using a questionnaire. Simple percentages analysis, descriptive statistics, factor assay, chi-square, and regression were utilized as statistical techniques. Individual investors have adequate awareness, motivation, and profitability in real estate investing.

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Risk measures for direct real estate investments with non-normal or unknown return distributions

Cited by 10 publications

References 59 publications

Unveiling and speculators in Addis Ababa: Insights, recommendations, and economic implications for sustainable development

Unveiling and speculators in Addis Ababa: Insights, recommendations, and economic implications for sustainable development

Rules for a coherent real estate risk scoring

Expediency of Investments in Real Estate Sector

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