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J. Risk Financial Manag. 2018, 11(4), 69; https://doi.org/10.3390/jrfm11040069

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

1
Royal Institute of Technology (KTH), Department of Real Estate and Construction Management, S-100 44 Stockholm, Sweden
2
Department of Civil of Engineering, Aalto University, 02130 Espoo, Finland
*
Author to whom correspondence should be addressed.
Received: 30 August 2018 / Revised: 8 October 2018 / Accepted: 14 October 2018 / Published: 26 October 2018
(This article belongs to the Special Issue Risk Analysis and Portfolio Modelling)
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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. View Full-Text
Keywords: mortgage portfolio; housing segments; risk assessment; hedonic modeling; analytic hierarchy process mortgage portfolio; housing segments; risk assessment; hedonic modeling; analytic hierarchy process
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Wilhelmsson, M.; Zhao, J. Risk Assessment of Housing Market Segments: The Lender’s Perspective. J. Risk Financial Manag. 2018, 11, 69.

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