Real Estate

Global financial crisis and debt crisis in recent times has drawn increased attention towards modern banking regulation and surveillance during asset management. One such important asset that needs attention in today’s globally economic scenario is real estate. Real estate bubbles decrease growth in the returns in investments and put government policies under severe scrutiny.

Governments around the world are cautious and structuring policies in a way to tackle a crisis that might be caused due to real estate bubbles. Standard measures for controlling real estate bubbles include increase in stamp duty and decrease in mortgage percentage. To understand the timing and causes of these bubbles governments are encouraging comprehensive real estate indices that provide a full picture of the changes in the real estate market and the prices during real estate management.

A real estate index that is comparable cross-regionally and across countries is essential for understanding and or forecast an emerging scenario of global economic crisis triggered by real estate bubbles. It would also allow investors and other stake holders to make cross-national comparisons. Risks associated with real estate market vary from region to region. An index which has uniformity and feasibility to provide cross-regional comparison can aid in identification of the problems caused due to the heterogeneous nature of risk assessment data. Risks of default in mortgage loans, banking risks and exposures could also be predicted through real estate index built using the data about these real estate risks.

Risk calculation based on operating cash flow, finance structure and credit and rent volatility are should supplement the real estate indices to understand the nature of the real estate bubble and to forecast the impact of these bubbles.s.