The importance of levering private finance and investment into urban regeneration is a central consideration of policy. Attention has focused on institutional investors' motives for holding regeneration investments and on how they might be encouraged to put more money into inner-city areas. The paper argues that, while helpful, the impact of such an approach upon urban regeneration will be limited. This is because, by definition, institutional investors are only interested in institutional property and buildings which do not conform to this frame of reference will not be of interest to them. However, other actors see things differently. Independent developers embrace the challenge presented by fringe locations, mixed uses and the local urban culture and aesthetic—and translate these characteristics into development values. Urban policy needs to address the contrasting ways in which the nature, construction and application of investors' strategic rationality intercept with local development conditions. In particular, greater emphasis should be given to encouraging independent, locally based forms of property investment and development.
Much of the housing submarket literature has focused on establishing methods that allow the partitioning of data into distinct market segments. This paper seeks to move the focus on to the question of how best to model submarkets once they have been identified. It focuses on evaluating effectiveness of multi-level models as a technique for modelling submarkets. The paper uses data on housing transactions from Perth, Western Australia, to develop and compare three competing submarket modelling strategies. Model one consists of a citywide "benchmark", model two provides a series of submarket-specific hedonic estimates (this is the 'industry standard') and models three and four provide two variants on the multi-level model (differentiated by variation in the degrees of spatial granularity embedded in the model structure). The results suggest that greater granularity enhances performance, although improvements in predictive accuracy will not necessarily offer compelling grounds for the adoption of the multi-level approach.
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