Is the Office Market Overvalued? A Simple Framework Applied to France

Jerome Coffinet and Etienne Kintzler ()

International Real Estate Review, 2019, vol. 22, issue 2, 275-306

Abstract: We develop a simple framework to assess the position of office prices with respect to their fundamentals. Applying the model to France, we show that a constrained office supply and low interest rates mainly explain for the high and increasing trend of office prices in recent years. Nonetheless, we find that the office market is only slightly overvalued in France in late 2017: the deviation of office prices with respect to their fundamental determinants is between 0% and 10%, thus indicating that the market is close to fair value.

Keywords: Commercial Real Estate; Overvaluation; Office Market; Error-Correction Model (search for similar items in EconPapers)
JEL-codes: L85 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (1)

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