Title: Dealing with the quality of real estate data: some issues for financial institutions

Authors: Gabriele Sampagnaro; Francesca Battaglia; Claudio Porzio

Addresses: Department of Management, University of Naples Parthenope, Naples, Italy ' Department of Management, University of Naples Parthenope, Naples, Italy ' Department of Management, University of Naples Parthenope, Naples, Italy

Abstract: This paper addresses the issue of data quality in the real estate market. In many countries, the returns indices for direct markets are provided by several sources differing in terms of the methodology adopted and index weights. These differences produce a lack of informative standardisation, which could negatively affect the ability of market participants to make predictions. By focusing on the Italian real estate market, the aim of the paper is therefore twofold: to investigate the reliability of property data sources and to assess the impact for financial intermediaries involved in real estate investments. Our results show a significant level of divergence between the data, and considerable implications for those financial institutions dealing with them. These findings conflict with the requirements of an efficient (or at least sub-efficient) market.

Keywords: real estate; data divergence; IRR; LGD; loss given default; efficient frontier; data quality; financial institutions; Italy; data reliability; property data sources; financial intermediaries.

DOI: 10.1504/IJFSM.2013.052875

International Journal of Financial Services Management, 2013 Vol.6 No.1, pp.17 - 38

Received: 21 Nov 2011
Accepted: 05 Aug 2012

Published online: 26 Mar 2013 *

Full-text access for editors Access for subscribers Purchase this article Comment on this article