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

The volatility of returns is probably the most widely used risk measure for real estate. This is rather surprising since a number of studies have cast doubts on the view that volatility can capture the manifold risks attached to properties and corresponds to the risk attitude of investors. A central issue in this discussion is the statistical properties of real estate returns—in contrast to neoclassical capital market theory they are mostly non-normal and often unknown, which render many statistical measures useless. Based on a literature review and an analysis of data from Germany we provide evidence that volatility alone is inappropriate for measuring the risk of direct real estate. We use a unique data sample by IPD, which includes the total returns of 939 properties across different usage types (56% office, 20% retail, 8% others and 16% residential properties) from 1996 to 2009, the German IPD Index, and the German Property Index. The analysis of the distributional characteristics shows that German real estate returns in this period were not normally distributed and that a logistic distribution would have been a better fit. This is in line with most of the current literature on this subject and leads to the question which indicators are more appropriate to measure real estate risks. We suggest that a combination of quantitative and qualitative risk measures more adequately captures real estate risks and conforms better with investor attitudes to risk. Furthermore, we present criteria for the purpose of risk classification

House Prices and Bubbles in New Zealand

This paper studies actual (real) house prices relative to fundamental (real) house values in New Zealand for the period 1970-2005. We find disparities between actual and fundamental house prices in the early 1970s and 1980s and from 2000 to date. These deviations are found to be substantially more pronounced than for New Zealand stocks. Contrary to the results that have been reported for many other countries, however, there is no evidence of a deviation in the latter part of the 1980s. Finally,we find that the current deviation of house prices from fundamentals is due to price dynamics rather than an overreaction to fundamentals.real house prices; real disposable income; fundamentals; present value; time-varying risk; bubbles; New Zealand.

Missed opportunities among HIV-positive women to control viral replication during pregnancy and to have a vaginal delivery.

INTRODUCTION: Most national guidelines for the prevention of mother-to-child transmission of HIV in Europe updated between 2001 and 2010 recommend vaginal deliveries for women with undetectable or very low viral load (VL). Our aim was to explore the impact of these new guidelines on the rates of vaginal deliveries among HIV-positive women in Europe. METHODS: In a pooled analysis of data on HIV-positive pregnant women enrolled in the Swiss Mother & Child HIV Cohort Study and the European Collaborative Study 2000 to 2010, deliveries were classified as occurring pre- or postpublication of national guidelines recommending vaginal delivery. RESULTS: Overall, 2663 women with 3013 deliveries were included from 10 countries; 28% women were diagnosed with HIV during pregnancy. Combination antiretroviral therapy was used in most pregnancies (2020, 73%), starting during the first or second trimester in 78% and during the third trimester in 22%; in 25% pregnancies, the woman conceived on combination antiretroviral therapy. Overall, in 86% pregnancies, a VL < 400 copies per milliliter was achieved before delivery. The proportion of vaginal deliveries increased from 17% (414/2377) before the change in guidelines to 52% (313/600) after; elective Caesarean section rates decreased from 65% to 27%. The proportion of women with undetectable VL having a Caesarean section was 55% after implementation of new guidelines. We observed a decrease of late preterm deliveries from 16% (377/2354) before to 7% (42/599) after the change in guidelines (P < 0.001). CONCLUSION: There are still missed opportunities for women with HIV to fully suppress their VL and to deliver vaginally in Europe