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Fundamental Analysis – Possiblity of Application on the Real Estate Market

Author

Listed:
  • Figurska Marta

    (Faculty of Geodesy, Geospatial and Civil Engineering, University of Warmia and Mazury in Olsztyn)

  • Wisniewski Radoslaw

    (Faculty of Geodesy, Geospatial and Civil Engineering, University of Warmia and Mazury in Olsztyn)

Abstract

The most common method supporting investing on the capital market or making decisions on the real estate market is technical analysis. This article, however, focuses on the less popular fundamental analysis, the importance of which is increasing on internationals markets, especially fully-developed ones.Fundamental analysis is used for long-term predictions of values of future phenomena, based on historical data and any factors likely to affect the level of supply and demand. The final result of its use is an appraisal the true value of the subject of valuation, or so-called fundamental (intrinsic) value.Using this method to analyze, diagnose and forecast economic phenomena, as well as become familiar with the market in terms of its fundamentals, positively influences the process of taking investment measures and leads to a better understanding of the real estate market.The aim of the following study is to describe the possibility of applying fundamental analysis on the real estate market, based on the principles existing on capital markets. This article serves as an introduction to the subject-matter as well as the beginning of series of publications dedicated to different aspects of conducting fundamental analysis in the context of the real estate market.

Suggested Citation

  • Figurska Marta & Wisniewski Radoslaw, 2016. "Fundamental Analysis – Possiblity of Application on the Real Estate Market," Real Estate Management and Valuation, Sciendo, vol. 24(4), pages 35-46, December.
    • Handle: RePEc:vrs:remava:v:24:y:2016:i:4:p:35-46:n:4
    DOI: 10.1515/remav-2016-0028
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    References listed on IDEAS

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    1. Ute Bonenkamp & Carsten Homburg & Alexander Kempf, 2011. "Fundamental Information in Technical Trading Strategies," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 38(7-8), pages 842-860, September.
    2. Hong, KiHoon & Wu, Eliza, 2016. "The roles of past returns and firm fundamentals in driving US stock price movements," International Review of Financial Analysis, Elsevier, vol. 43(C), pages 62-75.
    3. Wanfeng Yan & Ryan Woodard & Didier Sornette, 2014. "Inferring fundamental value and crash nonlinearity from bubble calibration," Quantitative Finance, Taylor & Francis Journals, vol. 14(7), pages 1273-1282, July.
    4. Simon Yu Kit Fung & Lixin (Nancy) Su & Xindong (Kevin) Zhu, 2010. "Price Divergence from Fundamental Value and the Value Relevance of Accounting Information," Contemporary Accounting Research, John Wiley & Sons, vol. 27(3), pages 829-854, September.
    5. Gao, Yan & Li, Honggang, 2011. "A consolidated model of self-fulfilling expectations and self-destroying expectations in financial markets," Journal of Economic Behavior & Organization, Elsevier, vol. 77(3), pages 368-381, March.
    6. Christian Hott & Pierre Monnin, 2008. "Fundamental Real Estate Prices: An Empirical Estimation with International Data," The Journal of Real Estate Finance and Economics, Springer, vol. 36(4), pages 427-450, May.
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    More about this item

    Keywords

    fundamental analysis; intrinsic value; fundamental factors; real estate market;
    All these keywords.

    JEL classification:

    • B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General
    • D46 - Microeconomics - - Market Structure, Pricing, and Design - - - Value Theory
    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock

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