Enhancing the Understanding of the Global Real Estate Environment
To enhance the understanding of real estate worldwide as an essential part of a country's economic and social fabric, countries should be bench-marked across the various dimensions of the global real estate environment. This includes the economic, financial, social, environmental and political dimensions of real estate.
Yet as both mature and emerging nations seek to enhance the economic and social well-being of their communities, an adequate understanding of the bench-marking of the global real estate environment is lacking. Importantly, tackling this deficiency in international cooperation would enhance all countries' understanding of their position in the global real estate environment and help address how they can progress the real estate culture in their country. This is particularly important for emerging markets as they seek fuller knowledge and appreciation of the role and contribution of real estate in the economic, social and environmental dimensions of their global development and interaction.
This Council proposes to institute a project to benchmark the global real estate environment. The aim is to benchmark the economic, financial, social, environmental and political dimensions of real estate in each country. A wide range of criteria would be assessed in various categories and sub-categories for each country. These categories would fully reflect the real estate environment, with expected real estate categories including: the regulatory environment, real estate taxation, transparency, disclosure, valuation and accounting systems, the availability of real estate services and information, real estate standards, macro-economic indicators, institutions, market efficiency, financial market and business sophistication, infrastructure, foreign ownership, sustainability practices, property rights, real estate education, the security of investment, the freedom of capital movement, housing market efficiency, home ownership issues, corruption, innovation, etc.
The methodology adopted would be similar to that used in the World Economic Forum's Global Competitiveness Report, with each country ranked between one and seven against the various criteria. Importantly, the criteria would be specifically focused on the real estate context of that criteria. Material would be supplemented with existing global real estate information (e.g., Jones Lang LaSalle's Global Real Estate Transparency Index).
Thus a global real estate environment index would be produced that ranks the various countries. This would be further broken down into real estate environment sub-indices to reflect the specific economic, financial, social and environmental dimensions of real estate. Sub-indices would be produced to cover both the commercial real estate and housing markets in each country. The final product would be a report that rates countries against the various criteria to establish a worldwide ranking, supplemented with one-page country profiles.
This global real estate environment index would be a powerful tool for countries to benchmark their real estate environment in a global context. It would enable governments to identify areas for improvement in their local real estate practices, and help investors more fully understand the specific dimensions of investing in real estate in the various global real estate markets.
*The views expressed here emerged from the Council meetings and do not necessarily reflect the views of the World Economic Forum or those of all the Council Members. - http://www.weforum.org/pdf/GAC09/council/future_of_real_estate/proposal.htm
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