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Improved price index for condominiums
KTH, School of Architecture and the Built Environment (ABE), Real Estate and Construction Management.ORCID iD: 0000-0003-4849-0726
KTH, School of Architecture and the Built Environment (ABE), Real Estate and Construction Management. (CEFIN)
2009 (English)Report (Other academic)
Abstract [en]

This paper proposes a price index construction methodology that can increase the quality ofprice index data for condominiums in Sweden. Currently, officially published market priceindexes for condominiums and houses in Sweden suffer from a number of shortcomings.Notably they do not control for quality, or they are based on dates when transfer of ownershipof the home occurs, and not the contract date. We develop a new price index that both controlsfor quality and reflect most recent price levels and changes. With access to a unique databasewe estimate alternative hedonic price indexes, and compare them both between themselves, aswell as with arithmetic mean and median price indexes. However, there is a trade-off betweencontrol of quality, access to the most recent transactions, and market coverage on one hand, andease of construction on the other hand.

Place, publisher, year, edition, pages
2009. , 28 p.
Keyword [en]
Apartment, price index, moving window regression, spatial econometrics, contract date
National Category
Economics Civil Engineering
URN: urn:nbn:se:kth:diva-11239OAI: diva2:248808
QC 20100810Available from: 2009-10-09 Created: 2009-10-09 Last updated: 2010-08-10Bibliographically approved
In thesis
1. Essays on risk and housing
Open this publication in new window or tab >>Essays on risk and housing
2009 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

There is a series of different types of risk on the housing market and related industries.  The six papers in this doctoral dissertation are about a number of the many dimensions of risk management on the housing market. The main message of this thesis is that it should be possible for different actors in the housing market to improve risk management. Indeed, the last years’ financial turmoil has revealed that it should not only be possible, but also necessary, to improve risk management at all levels of the economy: at household, corporate, regional, national and international level. Although the complexity of the environment in which we live and act makes it very difficult to predict and quantify risk, the development of risk management techniques should make it possible to better indentify, and reduce risk.

The first paper provides a systematic overview of a wide selection of methods or strategies used in different countries to expand but also to maintain home ownership among low income households. The second paper further discusses mortgage and home equity insurance instruments discussed in the first paper. This paper also discusses how a rental insurance policy, as an alternative to traditional rent regulation, may be constructed. Paper 3 develops a formula that might be used in order to value the rental insurance option discussed in paper 2. The fourth paper focuses on the housing building sector by discussing potential benefits of strategic alliances that the different actors in the housing construction market may establish in order to pool resources and manage development risks. The challenge of constructing reliable home price indexes has attracted scholars for many years. Paper 5 develops monthly quality-adjusted price indexes for condominiums (housing cooperative apartments) based on a unique dataset covering sales in the whole of Stockholm municipality from January 2005 to June 2009. Finally paper 6 pays attention to the large increase in housing cooperative conversions sine the 1990s, by deriving a closed-form valuation formula that might be used to value the embedded option an owner of a multi-family rental property has to sell it to a housing cooperative.

Place, publisher, year, edition, pages
Stockholm: KTH, 2009. xv p.
Trita-BFE, ISSN 1104-4101 ; 2009 : 87
housing risks, risk management, strategic alliances, housing construction, low-income housing, real options, tenure choice, rent regulation, housing cooperative conversion, price index
National Category
Economics Economics Economic Geography
urn:nbn:se:kth:diva-11233 (URN)978-91-977302-4-2 (ISBN)
Public defence
2009-10-28, V2, Teknikringen 76, KTH, Stockholm, 13:00 (English)
QC 20100810Available from: 2009-10-08 Created: 2009-10-07 Last updated: 2010-08-10Bibliographically approved

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