Real Estate Values at Risk: New Model Considers Market Cycles
The article discusses how traditional property valuation methods may not account for market cycles, leading to overestimation or underestimation of property values. The researchers introduce a new method called cyclical capitalization, which considers market cycles in property valuation. By using multiple growth rates, this method aims to provide a more accurate valuation of income-producing properties. The study applies this method to the office market in South Bank, London, showing its potential benefits in real-world scenarios.