Series: Occasional Papers. 2507.
Author: Luis Fernández Lafuerza, Irene Roibás and Raquel Vegas Sánchez.
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Abstract
Identifying the existence of price imbalances in commercial real estate is essential given their potential adverse impact on the economic activity of companies and financial stability. However, constructing imbalance indicators for this market in Spain is extremely complex, mainly due to the absence of sufficiently long historical information on prices. In this paper we present four imbalance indicators for the commercial real estate market, similar to those regularly used by the Banco de España for the residential real estate market. According to the results obtained, in the most recent period commercial real estate prices do not show signs of being above their long-term equilibrium level. However, due to the limitations regarding the historical availability of data, and the wide range of values that these indicators yield, the results obtained must be taken with due caution and continued advances made in the development of tools to monitor this market.