Please use this identifier to cite or link to this item: http://hdl.handle.net/11328/1796
Title: Rental income and cap rates a comparison of the Lisbon and Porto housing markets
Authors: Moreira, António Carrizo
Tavares, Fernando Oliveira
Pereira, Elisabeth T.
Keywords: Real estate appraisal
Income approach
Cap rates
Real estate investor
Cluster analysis
Lisbon
Porto
Issue Date: 2016
Publisher: Interdisciplinary Centre for Advanced Researches on Territorial Dynamics
Citation: Moreira, A.C. Tavares, F.O., & Pereira, E.T. (2016). Rental income and cap rates a comparison of the Lisbon and Porto housing markets. Journal of Urban and Regional Analysis, 8(2), 179-202.
Abstract: The goal of this article is to analyse the relationship between rental income and capitalisation rates when real estate value is assessed in parishes of the Lisbon and Porto municipalities. Based on housing market values in euros per square metre during the 2006-2009 period, the income approach was used to compare the two main types of apartments (i.e. B2, or two-bedroom, and B1, or one-bedroom) in Lisbon and Porto. We used the capital asset pricing model to calculate the risk measure. The cluster analysis was used to group the Lisbon and Porto parishes according to their rental income and capitalisation rates. Regressions were used to model both geographical markets. Clear differences were found between Porto and Lisbon, the results being more robust for the Porto municipality in regard to B2 apartments. Moreover, rental income is inversely proportional to capitalisation rates for B1 apartments for Porto parishes, which means that there is an initial overinvestment.
URI: http://hdl.handle.net/11328/1796
ISSN: 2068-9969
Appears in Collections:REMIT – Artigos em Revistas Internacionais / Papers in International Journals

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