Using leading indicators to forecast real estate returns

By separating capital growth into rental value growth and yield shift, variations in capital growth can be examined on the lowest possible level. By making use of so called leading indicators, changes in rental value growth and yield shift can be forecasted. This study makes use of a logistic regression approach which enables the use of chance models and results in a forecasting model that is able to predict the chance of actual rental value growth / yield shift a few quarters ahead