The (In-) Efficiency of the Real Estate Market: A Review of the Literature

  • Shanaka Herath (Contributor)
  • Philipp Kaufmann (Contributor)
  • Gunther Maier (Contributor)
  • Sabine Sedlacek (Contributor)

Activity: Talk or presentationScience to science


This paper discusses the question whether or not the real estate market is an efficient market. Based on a systematic search of the literature, we collect theoretical arguments and empirical evidence that will allow us to answer this question.

As will be discussed in the paper, the question of (in-) efficiency can be asked at various levels of the real estate market. This ranges from the micro- to the macrolevel. At the microlevel the question can be stated in the form of whether or not certain characteristics of real estate get incorporated in the price or value of a property and whether or not land is used in the way for which it is best suited. At the macrolevel the question of (in-) efficiency is closely related with cyclical behaviour of the market, with booms and bubbles. Although we will try to give an overview over the full range in the paper, the main focus of the review will be at the microlevel. This is motivated by the fact that this review of the literature is part of a larger project that deals with energy efficient construction and the issue whether more energy-efficiently constructed buildings can generate higher value in the real estate market.
Period27 Aug 200831 Aug 2008
Event title48th Congress of the European Regional Science Association
Event typeUnknown
Degree of RecognitionInternational

Austrian Classification of Fields of Science and Technology (ÖFOS)

  • 502042 Environmental economics
  • 507023 Location development