Impact case study database

Informing house price indices in Aberdeen/shire

CRER researchers (Schulz, Wersing) have produced the quarterly Aberdeen Housing Market Report (AHMR) since 2012Q2 to the present day [S1, S2]. This report is based on a cooperation between the CRER of the Business School and the Aberdeen Solicitors Property Centre (ASPC), the largest in Scotland (ASPC recorded 30,000 registered users and 1,360,000 views during August 2020). ASPC stores information relating to advertised properties electronically, including transaction prices, and has sought to use these data to make the market more transparent. This ambition was realised through the collaboration with the CRER of the Business School. In particular, ASPC is considering implementing an AVS based on Drs Schulz and Wersing’s recommendations [S4]. Furthermore, since 2020Q2 the AHMR offers additional relevant information to market participants, such as a quality-controlled ask-to-sale price index. This index indicates the continuing value of the research and collaboration to users in the local region [S3].

ASPC themselves have attested to the value of the research of the Business School’s CRER to their work, particularly the extended Aberdeen Housing Market Report: ’Over time, the CRER has suggested, and the Centre [ASPC] has willingly accepted, improvements to the report. Since 2020, the report has included further information, such as the quality-controlled ask to sale index […] The Centre benefits from this cooperation through the exposure gained in the local area. New reports are featured in the press and all issues of the report are available on the Centre's web platform. The methods underlying the report are transparent and available to read on the CRER webpage. The information contained in the report is trustworthy.’ Chairman, ASPC Ltd [S4].

The reports, which are available from the ASPC, the University of Aberdeen Business School, and are listed as an official source of house price information by Aberdeenshire Council for the North East of Scotland, can be accessed by users in the public domain [S5]. They are regarded with high esteem by local press, such as the BBC, as well the Scottish Legal News (readership c.12, 521 in 2019) [S5]. Given its status as a trusted source, users of the index have become increasingly diversified and now include local councils for planning decisions, surveyors, housing associations, and financial institutions [ text removed for publication] [S6].

Demonstrating the wider application of the AHMR to new users

CRER researchers have given presentations to facilitate usage of the Aberdeen Housing Market Report (AHMR) – for instance, within the workshop on Local Governance in Scotland and Malaysia, 2017, which was held at the University of Aberdeen. This workshop included participants from Aberdeenshire Council and from the Malaysian Ministry of Urban Wellbeing, Housing and Local Government, the Valuer Society, and from several other local councils [S7].

Improving automated valuation models and services for the main hedonistic index for the Swiss market

The Swiss Informations- und Ausbildungszentrum für Immobilien AG (IAZI, https://www.iazicifi.ch/markt/immobilien\-indizes/) provides transaction and list price indices for many different segments of the Swiss housing market. The SWX IAZI Real Estate Indices are the main hedonic index for the Swiss market; these hedonic indices are published quarterly in cooperation with Six-Group. The IAZI indices are highly regarded, both regionally and nationally [S8i]. Prof. Hoesli was pivotal in the establishment of IAZI and continues to chair the annual meetings at which all statistical models and data procedures are reviewed. The meetings discuss both the quality of data and the statistical models used to estimate the indices and facilitate annual improvements to the models. Important inputs to the reviews are Prof. Hoesli’s reports on research on index construction methodology, leading to critical analysis and validation of the hedonic property pricing models for Switzerland [S8ii]. He has further informed these models by developing approaches to construct indices that are robust to outliers and that are viable in a scarce data environment.

The IAZI also runs AVSs for the majority of residential properties in Switzerland, covering approximately 80% of transactions [S8i, iii]. Automated valuations are offered by the IAZI to property buyers and sellers, banks and professional landlords. Prof. Hoesli’s research on these estimators has had a direct impact on how these AVMs are estimated from transactions [S8iii], ensuring that the statistical models that are used for AVMs are fitted with estimators that are robust towards outliers.

The chairman of the IAZI Board of Directors has stated, ‘ At IAZI, with the collaboration of Prof. Martin Hoesli and other academics, we want to continue our efforts to understand better the dynamics of real estate markets in Switzerland. By providing research and training to professionals throughout the Swiss real estate industry, we contribute to a higher transparency and appropriate/best usage of the limited information available […] [Hoesli’s] broad knowledge of the current and ongoing academic papers and research, of which he provides to IAZI a very valuable in­put in our regular exchanges, invite us to try out and apply the latest findings of other markets to our market’ [S8iii].

Introducing AVS to the Berlin real estate market

Drs Schulz and Wersing developed an automatic web-based valuation service for single-family houses with the Expert Committee for Property Values, a public and independent institution of the State of Berlin, in order to increase the transparency of the Berlin real estate market. Drs Schulz and Wersing have been pivotal in the establishment of the resulting AVS md*immo (https://bit.ly/2N9tBtC\). Their continuing research has led to improvements in the statistical model for the AVM used in this AVS, as confirmed by the Head of the Expert Committee for Property Values. The Head of the Committee also added that ‘ *the [AVS] md*immo project was definitely a success […] we continue to follow the research of Dr Schulz and Dr Wersing to automated rating systems. We hope that this research will also fertilize md*immo, which is now being carried out by the TU [*Technische Universität ] Berlin.’ [S9]