Spatial and multidimensional analysis of the Dutch housing market using the Kohonen Map and GIS

In this work the idea is to analyse general spatially identifiable housing market related data on Dutch districts (wijken) with the SOM (Kohonen Map) and a GIS. One of the authors has earlier carried out purely visual SOM analysis of that data, where patterns formed on a larger ‘map’ (the output matrix of the SOM) were used as a basis for classification of the Dutch housing market segments on a nationwide level. This way the SOM was used as a method for exploratory data analysis. Now we attempt a more rigorous method of determining the segmentation using a smaller ‘map’ size, in order to be able to export the SOM-output directly to a GIS-system to analyse it further. Two technical issues interest us: one, the robustness of the results – do the five basic housing market segments found in the earlier analysis prevail (we call these urban, urban periphery, pseudo-rural, traditional, and low-income segments); and two, which classes fit the real situation better and which worse, when using the RMSE for a measure of goodness? We also keep an eye on policy implications and aim at comparing our classifications with the ‘actual’ ones used in official discourse.

Real Estate Appraisal in the Aftermath of the Coronavirus Pandemic

In February 2020 the coronavirus (COVID-19) begun to roll over the globe. Suddenly, some true resilience leadership – or at least, decisiveness – was needed from individual citizens and businesses. The crisis conditions also forced some sectors and industries to be innovative, in search for solutions. This contribution speculates about the future of real estate appraisal, and the extent it is being affected by the crisis. The implications of the ongoing and future virus crises for real estate appraisal are examined using the concept of risk, and, in doing so, a potential methodological innovation based on subjective risk analysis of real estate investments is argued for. The consequences are likely to fit in the space between the extreme scenarios: that nothing will change, and that all with change. So, we do not believe that the distribution of rental incomes and property values will be the same as before, but we also do not buy the claim of some kind of end of real estate. Instead, what seems plausible is to approach the issue by establishing the risk; that is to say, how the real estate industry is reacting to an inevitable resetting of the businesses of the tenants, based on how adaptable the industry and sector is. The findings of the conceptual analysis highlight the potentially changing context of real estate appraisal in terms of localization of economic and social activity; preferences for distance practices and private sector activities; and implications for investment risk

Real Estate Appraisal in the Aftermath of the Coronavirus Pandemic

In February 2020 the coronavirus (COVID-19) begun to roll over the globe. Suddenly, some true resilience leadership – or at least, decisiveness – was needed from individual citizens and businesses. The crisis conditions also forced some sectors and industries to be innovative, in search for solutions. This contribution speculates about the future of real estate appraisal, and the extent it is being affected by the crisis. The implications of the ongoing and future virus crises for real estate appraisal are examined using the concept of risk, and, in doing so, a potential methodological innovation based on subjective risk analysis of real estate investments is argued for. The consequences are likely to fit in the space between the extreme scenarios: that nothing will change, and that all with change. So, we do not believe that the distribution of rental incomes and property values will be the same as before, but we also do not buy the claim of some kind of end of real estate. Instead, what seems plausible is to approach the issue by establishing the risk; that is to say, how the real estate industry is reacting to an inevitable resetting of the businesses of the tenants, based on how adaptable the industry and sector is. The findings of the conceptual analysis highlight the potentially changing context of real estate appraisal in terms of localization of economic and social activity; preferences for distance practices and private sector activities; and implications for investment risk

Urban Housing Patterns in a tide of change:

The development of the housing markets in different European metropolitan areas is of high interest for the urban development and the real estate markets, which are moving towards globalisation. The Budapest housing market is an ideal candidate for scrutiny from an institutional and evolutionary perspective due to its fragmented nature: different house types, age categories, price levels and micro-locations are found side by side. This is a case ‘in between’ Eastern and Western settings, with its own distinctive path dependence – its development pattern does not resemble any other system. The study comprises an innovative economic analysis of the Budapest housing market structure. Applying the self-organising map and the learning vector quantification sheds light on how physical and socio-demographic characteristics, price and regulation are related in this market. Further analysis is carried out using the analytical hierarchy process together with in-depth interviews of experts and a case study of urban renewal in two neighbourhoods using market data. The results are compared with those of a prior study from Helsinki and Amsterdam, as well as with more general theory literature. The results suggest a great difficulty in relating the empirical findings from Budapest to mainstream theory of housing markets

Comparing spatial features of urban housing markets:

Various location specific attributes contribute to the spatial dynamics of housing markets. This effect may partly be of a qualitative and discontinuous nature, which causes market segmentation into submarkets. The question however is, whether the most relevant partitioning criteria is directly related to the transaction price of to other, socioeconomic, demographic and physical features of the location. Two neural network techniques are used for analysing statistical house price data from Amsterdam and Helsinki. The analytic hierarchy process is used as a supporting technique. With these techniques it is possible to analyse various dimensions of housing submarket formation. The findings show that, while the price and demand factors have increased in importance, supply factors still prevail as key criteria in both cases. The outcome also indicates that the housing market structure of Amsterdam is more fragmented than that of Helsinki, and that the main discriminating housing market features, and the ways they have changed in time, are somewhat different

Finding an apt strategy for (what we currently believe is) sustainable urban land use and area development

The long-term viability and management success of local economic development is a vital precondition for embarking on sustainable urban land use and area development paths. This paper examines two interlinked goals within this normative discourse: innovativeness and social cohesion. Based on literature and documentation of best practice, it is argued that a mature market for private investment provides the most viable framework for sustainability. While this perspective works better for developed countries, opportunities arise also for the lesser developed regions when technology, institutions and behaviours develop incrementally in response to successful trial and error corrections of policies implemented

Territorial competition in the new economy:different strategies in different urban settings

Territorial competition in the New Economy comprises a variety of strategies, both direct and indirect ones. In this paper, first the most common direct strategies (traditional, ICT, cultural) are discussed from an interdisciplinary perspective (urban geography, economic geography and urban economics, at least). Then, some indirect real estate and housing strategies (value creation, affordability) are discussed. After that, the post-socialist context (where Richard Florida’s ideas have a high uptake) is examined as a specific case of dynamic territorial competition process. Finally, a summary and conclusions are given

‘We are not afraid of flooding’ …but what about landslide? The effects of assumed and perceived hazards on the value of residential locations

The issue of interest is as to whether it is possible to use the added value generated by the positive effect of having housing developments close to water to abate the negative effects that may arise in some of the same locations. This paper is based on a critical literature review together with expert interviews. It comments on the methodology of spatial benefit-cost analysis (benefit for price premium ‘generated’ by the amenity; costs for price discounts ‘generated’ by the risk) in relation to design of housing and hazard management mechanisms within the context of urban land use in contemporary Trondheim, Norway. The particular issue at stake concerns potential quick clay landslide hazard areas. Prior research suggests that the role of situation by a coast, lake or river should not be overlooked when assessing possibilities for financing general water related hazard abatement schemes. This is potentially a win-win-situation: safety enhancing public works could be financed based on the added value of new developments at the given location. The purported kind of innovative financial mechanism however requires close cooperation between private developers and local authorities – in other words, governance instead of government – as well as flexible legal codes. Unfortunately the study area to a great extent lacks such institutional possibilities due to an outmoded conceptualization of the role of government intervention