This paper investigates the price effect of Energy Performance Certificate (EPC) ratings on residential dwelling prices in Wales. Drawing on a sample of approximately 192,000 transactions, the capitalisation of energy efficiency ratings into house prices is investigated using two approaches. The first adopts a cross-sectional framework to investigate the effect of EPC rating on price. The second approach is based on a repeat-sales methodology to investigate the impact of EPC rating on house price appreciation. Statistically significant positive price premiums are estimated for dwellings in EPC bands A/B (12.8%) and C (3.5%) compared to houses in band D. For dwellings in band E (-3.6%) and F (-6.5%) there are statistically significant discounts. Such effects may not be the result of energy performance alone. In addition to energy cost differences, the price effect may be due to other benefits of energy efficient features. An analysis of the private rental segment reveals that, in contrast to the general market, low-EPC rated properties were not traded at a significant discount. This suggests different implicit prices of potential energy savings for landlords and owner-occupiers.

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There is a substantial literature which suggests that appraisals are smoothed and lag the true level of prices. This study combines a qualitative interview survey of the leading fund manager/owners in the UK and their appraisers with a empirical study of the number of appraisals which change each month within the IPD Monthly Index. The paper concentrates on how the appraisal process operates for commercial real estate performance measurement purposes. The survey interviews suggest that periodic appraisal services are consolidating in fewer firms and, within these major firms, appraisers adopt different approaches to changing appraisals on a period by period basis, with some wanting hard transaction evidence while others act on 'softer' signals. The survey also indicates a seasonal effect with greater effort and information being applied to annual and quarterly appraisals than monthly. The analysis of the appraisals within the IPD Monthly Index confirms this effect with around 5% more appraisals being moved at each quarter day than the other months. More November appraisals change than expected and this suggests that the increased information flows for the December end year appraisals are flowing through into earlier appraisals, especially as client/appraiser draft appraisal meetings for the December appraisals, a regular occurrence in the UK, can occur in November. January illustrates significantly less activity than other months, a seasonal effect after the exertions of the December appraisals.

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This paper investigates the scale and determinants of foreign investment flows between national real estate markets. Using data for over 100 countries over 2007-2012, the results indicate that, consistent with previous studies for trade, foreign direct and portfolio investment variables such as size and distance have significant effects on foreign real estate investment flows. Large positive size effects are consistent with a combination of scale economies and information externalities producing investment concentration across markets and in conjunction with direct and indirect transaction costs specific to real estate markets. Physical distance coefficients are relatively small compared to the studies of FDI.

Based on a sample of office markets in 33 cities across 16 countries for the period 2007-2015, this paper explores variations in commercial real estate transaction activity and asset pricing in international office markets. It is argued that there are complex interactions and feedback relationships between asset prices, transaction activity, market conditions and local institutional structures in real estate markets. Commercial real estate pricing is modelled using data on capitalization rates. The relationships found are consistent with previous research in terms of the importance of drivers such as government bond yields, yield spreads and real estate rents. Consistent with information network effects, it is also found that larger and more mature markets tend to have lower cap rates and, thus, higher asset prices. The results for transaction activity are less clear cut. Results from econometric analysis of turnover rates suggest that the same explanatory factors do not determine transaction activity to the same extent as cap rates. When purged of possible joint determinants, there is no evidence to support the view that cap rates affect market turnover rates or that turnover rates affect cap rates.

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This paper was written with the support of the Real Estate Research Institute and presented at their 2016 conference. We thank CBRE and Real Capital Analytics for access to the data used in this study and we thank the project mentors and conference participants for their feedback on earlier versions. We also thank the journal referees for useful comments.