Risk Assessment of Housing Market Segments: The Lender’s Perspective

Mats Wilhelmsson , Jianyu Zhao

Research output: Contribution to journalArticleScientificpeer-review

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Abstract

It is well known that risk factors influence how investment portfolios perform from a lender’s perspective; therefore, a thorough risk assessment of the housing market is vital. The aim of this paper was to analyze the risks from housing apartments in different housing market segments by using the Stockholm, Sweden, owner-occupied apartment market as a case study. By applying quantitative and systems engineering methods, we (1) established the relationship between the overall housing market and several housing market segments, (2) analyzed the results from the quantitative model, and (3) finally provided a feasible portfolio regarding risk control based on the given data. The goal was to determine how different housing segment factors could reveal risk towards the overall market and offer better outlooks for risk management when it comes to housing apartments. The results indicated that the risk could be reduced at the same time as the return increased. From a lender’s perspective, this could reduce the overall risk.
Original languageEnglish
Number of pages22
JournalJournal of Risk and Financial Management
Volume11
Issue number4
DOIs
Publication statusPublished - 26 Oct 2018
MoE publication typeA1 Journal article-refereed

Keywords

  • mortgage portfolio
  • housing segments;
  • risk assessment
  • hedonic modeling
  • analytic hierarchy process

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