Issues in the development and application of property market forecasting: the investor’s perspective

Forecasts of rental growth are increasingly being required by and provided to property investors by a growing number of suppliers. Reviews the uses to which such forecasts are put by a major Uk institutional investor and, from a relatively unique vantage point, critically reviews the forecasting services available in the marketplace. In doing so, it identifies the main forecasting approaches adopted, highlights some of the clear inconsistencies between forecasters in terms of what they are forecasting, how they are forecasting and the different data sources they are using. Explains some of the causes for substantial variations observed in the forecasts provided and, finally, explores the potential for systematic forecasting errors. Concludes by emphasizing the need to switch attention from technical methods to improved “view formation”.