January 30, 2012
More in: Blog
As a part of my studies on BI Norwegian Business School, I wrote a Master Thesis, together with a fellow student, Ketil Nereng. The topic: “Forecasting rental rates for Norwegian commercial real estate”. The study uses rental rate statistics from Eiendomsverdi Næring, a Norwegian firm solely working with gathering and producing real estate statistics. The goal of the study was to identify key determinants of changes in real rents and producing a forecasting model able to outperform a random walk and yield significant forecasts.Why are these studies important?
Because too much of the future market rents are a function of today’s rent, conjecture and speculation on future rent levels. Of course a qualitative approach is an important aspect in establishing prognosis on rent levels, but a more quantitative approach is required. Rent levels in the Oslo market have showed a highly cyclical movement for the period in which data is available. ...