Open AccessInternational Real Estate Review
Author(s) -
Jérôme Coffinet,
Etienne Kintzler
Publication year - 2019
Publication title -
journal of the asian real estate society
Language(s) - English
Resource type - Journals
ISSN - 1029-6131
DOI - 10.53383/100282
Subject(s) - real estate , position (finance) , economics , value (mathematics) , financial economics , interest rate , econometrics , monetary economics , finance , mathematics , statistics
We develop a simple framework to assess the position of office prices with respect to their fundamentals. Applying the model to France, we show that a constrained office supply and low interest rates mainly explain for the high and increasing trend of office prices in recent years. Nonetheless, we find that the office market is only slightly overvalued in France in late 2017: the deviation of office prices with respect to their fundamental determinants is between 0% and 10%, thus indicating that the market is close to fair value.