Electronic Real Estate in Europe
View and Contrast of the Approaches of Germany and United Kingdom
©2007
Masterarbeit
78 Seiten
Zusammenfassung
Inhaltsangabe:Introduction:
The Internet as a communication medium is integrated in almost every process of todays business. Barely one company can ignore the Internet technology. Hence, it is not astonishing that nowadays the Internet has a great impact on real estate transactions. The question that arises is whether the real estate business is ready for this technology or not. This affects the company side as well as the customer side. Eventually both sides have to be familiar with the technology to accomplish the conclusion of the contract. Although many businesses still work the traditional way, which means the physical trade, the evolution obtains everyone. Still many companies deal their real estate avoiding the Internet. However the reality shows a different picture. More and more people get used to the Internet. Roughly everything is marketable over the Internet, so now people select the Internet likewise for selling or buying online or simply just to get a picture of the market. Hence, the companies have to catch up and adapt to the market change.
The idea of integrating the Internet into real estate business has an important background: it is imperative to increase the number of customers. Technologies like Internet help for instance smaller companies to reach customers all around the globe. An opportunity like this was unimaginable a few years ago. In detail it means that a real estate company needs at most premises an own or public server and is able to create a business on an entire virtual platform. Increasing the number of customers and decreasing the costs through saving time and effort has a huge impact on the business development.
Although the online real estate industry has not reached an optimum level in Europe, several countries are pushing the development forward. Despite all this the process starts slowly. The change from a face-to-face business to a virtual commerce causes different dilemmas. Beside technical issues the whole selling and buying process has to be overworked and this costs vastly money and time. The change of business is influenced by economic resources, technological progress and meeting the customers expectations.
Germany and the United Kingdom both show very active real estate markets. Given a comparative, high and dense population, the total volume of real estate transactions is fairly high. Additionally the residential properties are interesting for both sides and hence the trade among each other is […]
The Internet as a communication medium is integrated in almost every process of todays business. Barely one company can ignore the Internet technology. Hence, it is not astonishing that nowadays the Internet has a great impact on real estate transactions. The question that arises is whether the real estate business is ready for this technology or not. This affects the company side as well as the customer side. Eventually both sides have to be familiar with the technology to accomplish the conclusion of the contract. Although many businesses still work the traditional way, which means the physical trade, the evolution obtains everyone. Still many companies deal their real estate avoiding the Internet. However the reality shows a different picture. More and more people get used to the Internet. Roughly everything is marketable over the Internet, so now people select the Internet likewise for selling or buying online or simply just to get a picture of the market. Hence, the companies have to catch up and adapt to the market change.
The idea of integrating the Internet into real estate business has an important background: it is imperative to increase the number of customers. Technologies like Internet help for instance smaller companies to reach customers all around the globe. An opportunity like this was unimaginable a few years ago. In detail it means that a real estate company needs at most premises an own or public server and is able to create a business on an entire virtual platform. Increasing the number of customers and decreasing the costs through saving time and effort has a huge impact on the business development.
Although the online real estate industry has not reached an optimum level in Europe, several countries are pushing the development forward. Despite all this the process starts slowly. The change from a face-to-face business to a virtual commerce causes different dilemmas. Beside technical issues the whole selling and buying process has to be overworked and this costs vastly money and time. The change of business is influenced by economic resources, technological progress and meeting the customers expectations.
Germany and the United Kingdom both show very active real estate markets. Given a comparative, high and dense population, the total volume of real estate transactions is fairly high. Additionally the residential properties are interesting for both sides and hence the trade among each other is […]
Leseprobe
Jan-Philip von Gottberg
Electronic Real Estate in Europe
View and Contrast of the Approaches of Germany and United Kingdom
ISBN: 978-3-8366-2406-0
Herstellung: Diplomica® Verlag GmbH, Hamburg, 2009
Zugl. University of Westminster, London, Großbritannien, MA-Thesis / Master, 2007
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Electronic Real Estate in Europe: Review and Contrast of the Approaches of Germany and United Kingdom
Page 2
Content
List of Tables... 4
List of Figures... 5
Abstract... 8
1. Introduction... 9
1.1 General... 9
1.2. Objectives... 10
2. Preliminary Context ... 12
2.1. Description of the German Territory and basic Characteristics... 12
2.2. The German Real Estate Market Situation and Development ... 12
2.2.1. Market Situation... 12
2.2.2. Price and Transaction Development ... 13
2.2.3. Internet Development and eCommerce... 14
2.3. Description of the United Kingdom Territory and basic Characteristics... 15
2.4. The United Kingdom Real Estate Market Situation and Development ... 17
2.4.1. Market Situation... 17
2.4.2. Price and Transaction Development ... 17
2.4.3. Internet Development and eCommerce... 18
2.5. Online Market Structure in Germany and United Kingdom... 19
3. Methodology ... 20
4. Literature Review... 22
4.1. Internet as a Marketplace... 22
4.2. Online Real Estate Overview... 22
4.3. Online Real Estate in Germany ... 24
4.4. Online Real Estate in United Kingdom ... 25
5. Analysis of the development of online real estate industry in Germany ... 27
5.1. Synopsis on progress of German online real estate market ... 27
Electronic Real Estate in Europe: Review and Contrast of the Approaches of Germany and United Kingdom
Page 3
5.1.1. Market Development ... 27
5.1.2. Market Leaders ... 30
5.2. Review of real estate websites ... 32
5.3. Web Design evaluation of real estate websites... 40
6. Analysis of the development of online real estate industry in United Kingdom ... 41
6.1. Synopsis on progress of United Kingdom online real estate market ... 41
6.1.1. Market Development ... 41
6.1.2. Market Leaders ... 43
6.2. Review of real estate websites ... 44
6.3. Web Design evaluation of real estate websites... 51
7. Analytical comparison Germany United Kingdom... 52
7.1. Comparison of procedural and technological backgrounds ... 52
7.1.1. Explicit and implicit disparities of the German and United Kingdom functional real estate market... 52
7.1.2. Explicit and implicit disparities of the German and United Kingdom online real estate market... 55
7.1.3. Cultural Differences and Market Behaviour ... 57
7.2. Comparison of real estate websites and projects... 57
7.2.1. Contrast of German and United Kingdom real estate websites regarding Market Development and
Leadership... 57
7.2.2. Contrast of German and United Kingdom real estate websites regarding Web Design Evaluations ... 60
7.3. Ecommerce Adoption and Implementation on the Real Estate Markets ... 62
7.3.1. Advancement and Improvement... 62
7.3.2. Website Marketing... 64
8. Discussion ... 65
9. Conclusion ... 67
10. Reflective Statement ... 71
References... 72
Electronic Real Estate in Europe: Review and Contrast of the Approaches of Germany and United Kingdom
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List of Tables
Table 1 Development of the Real Estate Websites as at April 2006 (Obermann, 2006)
... 32
Table 2 - Website Evaluation concerning Web design and Usability ... 40
Table 3 Website Evaluation concerning Web design and Usability (Bradley, 2007)... 51
Table 4 Contrast of German and United Kingdom Market Development & Leadership
... 58
Table 5 - Contrast of German and United Kingdom Market Web Design Evaluations... 60
Table 6 Traditional and Online Marketing in Germany and United Kingdom... 64
Electronic Real Estate in Europe: Review and Contrast of the Approaches of Germany and United Kingdom
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List of Figures
Figure 1 Prices in % compared to previous year (Walter & Just, 2006) ... 14
Figure 2 - German Internet User in Millions (ARD, 2005)... 15
Figure 3 House Prices in Europe (Just, 2005)... 18
Figure 4 - Percentages of Internet Users in United Kingdom (Office for National
Statistics, 2006)... 19
Figure 5 Results of Internet Marketing for Supplier Purposes (Immo Media Consult,
2002) ... 28
Figure 6 Internet User who moved in the last 12 Months as at May 2006(Hallmann &
Langer, 2006) ... 28
Figure 7 Number of used Real Estate Websites in 2002(Immo Media Consult, 2002)29
Figure 8 Percentage of sales channels and utilised budget (Immo Media Consult,
2007) ... 30
Figure 9 Page Impressions of selected Real Estate Websites (Immo Media Consult,
2002) ... 31
Figure 10 Use of Real Estate Websites (Immo Media Consult, 2002) ... 31
Figure 11 Percentage of contract conclusions with customers through the Internet
(Immo Media Consult, 2007) ... 32
Figure 12 Homepage of the website immobilienscout24.de ... 34
Figure 13 Homepage of the website immonet.de... 35
Figure 14 Homepage of the website immowelt.de ... 36
Figure 15 Homepage of the website of Engel & Völkers ... 37
Figure 16 Homepage of the Website of LBS ... 38
Electronic Real Estate in Europe: Review and Contrast of the Approaches of Germany and United Kingdom
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Figure 17 Homepage of the Website of Atisreal ... 39
Figure 18 Top Websites in United Kingdom based on Visits in 2007 (Hitwise, 2007). 43
Figure 19 Homepage of the Website of Primelocation.co.uk ... 45
Figure 20 Homepage of the Website of Findaproperty.co.uk... 46
Figure 21 Homepage of the Website of Propertyfinder.co.uk ... 47
Figure 22 Homepage of the Website of Homesonview.com... 48
Figure 23 Homepage of the Website of Rightmove.co.uk... 49
Figure 24 Homepage of the Website of Vebra.com ... 50
Figure 25 German Online Real Estate System ... 55
Figure 26 United Kingdom Online Real Estate System ... 56
Figure 27 Internet Readiness Levels (Chaffey, 2006)... 62
Figure 28 Marketplace Channel Structure (Chaffey, 2006) ... 63
Figure 29 Comparison of radical and incremental Improvement (Amin, 2007)... 63
Electronic Real Estate in Europe: Review and Contrast of the Approaches of Germany and United Kingdom
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Acknowledgement
I would like to acknowledge the support and guidance of my supervisor Nigel Bradley.
Electronic Real Estate in Europe: Review and Contrast of the Approaches of Germany and United Kingdom
Page 8
Abstract
Over the last 15 years, the Internet industry has developed at the double. Hence, it is
hardly surprising that the advancement of Internet caught up with the real estate in-
dustry. Many critics have argued that the Internet is not incorporated yet into the daily
business of the real estate industry. Moreover, these critics state that the potential is
not exploited enough and many promises are unused. The analysis of the progress of
two different countries in Europe may be valuable to provide a summary concerning
the evolution of the digital environment in the real estate industry.
The purpose of this report is to present the advancement and progress of the online
real estate markets in Germany and the United Kingdom. Furthermore, it is the aim to
contrast the consistencies and disparities. Finally, the different approaches of Germany
and the United Kingdom will be highlighted and evaluated.
In order to secure an adequate methodology being used, a comparative case study is
integrated and particular elements are shown and contrasted to form a picture of the
situation of the online real estate market.
The results indicate the advancement of the German online real estate market. Al-
though the online real estate industry was going fine over the last years, a definite lack
of usability and information aspects is in plain view. Crucial website elements were left
out all or part on certain online real estate homepages. Due to this characteristic the
online advancement in Germany can be defined as underdeveloped. Moreover, the
real estate market has stagnated over the last years regarding the price development.
This fact is one of the reasons Internet and real estate is not attached the importance
that it is intended to be.
In comparison, the United Kingdom shows strongly more advancement in the last
years and due to that the level of Internet connected to real estate industry is fairly
high. Additionally, the prices of real estate increased over the last years and a market
turnaround is not foreseen yet. Consequently, it is attached more value to the Internet
technology and the development is very much supported by the real estate compa-
nies.
Electronic Real Estate in Europe: Review and Contrast of the Approaches of Germany and United Kingdom
Page 9
1. Introduction
1.1 General
The Internet as a communication medium is integrated in almost every process of to-
day's business. Barely one company can ignore the Internet technology. Hence, it is
not astonishing that nowadays the Internet has a great impact on real estate transac-
tions. The question that arises is whether the real estate business is ready for this
technology or not. This affects the company side as well as the customer side. Eventu-
ally both sides have to be familiar with the technology to accomplish the conclusion of
the contract. Although many businesses still work the traditional way, which means
the physical trade, the evolution obtains everyone. Still many companies deal their real
estate avoiding the Internet. However the reality shows a different picture. More and
more people get used to the Internet. Roughly everything is marketable over the
Internet, so now people select the Internet likewise for selling or buying online or sim-
ply just to get a picture of the market. Hence, the companies have to catch up and
adapt to the market change.
The idea of integrating the Internet into real estate business has an important back-
ground: it is imperative to increase the number of customers. Technologies like Inter-
net help for instance smaller companies to reach customers all around the globe. An
opportunity like this was unimaginable a few years ago. In detail it means that a real
estate company needs at most premises an own or public server and is able to create a
business on an entire virtual platform. Increasing the number of customers and de-
creasing the costs through saving time and effort has a huge impact on the business
development.
Although the online real estate industry has not reached an optimum level in Europe,
several countries are pushing the development forward. Despite all this the process
starts slowly. The change from a face-to-face business to a virtual commerce causes
different dilemmas. Beside technical issues the whole selling and buying process has to
be overworked and this costs vastly money and time. The change of business is influ-
enced by economic resources, technological progress and meeting the customer's ex-
pectations.
Electronic Real Estate in Europe: Review and Contrast of the Approaches of Germany and United Kingdom
Page 10
Germany and the United Kingdom both show very active real estate markets. Given a
comparative, high and dense population, the total volume of real estate transactions is
fairly high. Additionally the residential properties are interesting for both sides and
hence the trade among each other is very active.
Nevertheless, the online real estate markets of both countries could not differ more. In
the German market almost every agent makes his own business. In the United King-
dom in contrary most of the agents are incorporated in a combined network. Different
approaches with different results.
What are the main differences of the online real estate industry and to what extent are
these diverse approaches effective?
In order to highlight the crucial elements, the research is made up of several successive
chapters: Firstly, Germany and United Kingdom are evaluated individually according to
special criteria based on the review and a web design evaluation of the real estate
websites.
Secondly, the results are compared and added with further aspects, in particular the
disparities of the market behaviours and the use of information and communication
technologies.
1.2. Objectives
The combination of prior mentioned elements contributes to accomplish the following
objectives:
· To evaluate the advancement of the online real estate industry in Germany
The aim is to assess how far the online real estate industry in Germany is devel-
oped and to what extent the user is supported and benefited when using the
online gateway.
· To investigate the evolution of online real estate industry in United Kingdom
Electronic Real Estate in Europe: Review and Contrast of the Approaches of Germany and United Kingdom
Page 11
Targeting the United Kingdom online real estate market, it is the purpose to find
out how the evolution of the market has conducted.
· To contrast the disparities between the German and the United Kingdom ap-
proaches of online real estate
It is examined how a difference between Germany and United Kingdom exists and
to what extent.
· To assert the potential of aspects used in the online real estate industry
Finally, it is highlighted if there are certain usability features that are used by the
real estate companies to support their online business.
In the following chapter a review of the backgrounds of United Kingdom and Germany
is provided. This component highlights the essential characteristics of both countries
and additionally illustrates the Internet background and the real estate structures in-
cluding the impact on the market. Further on the methodology explains how the data
was gathered and evaluated. The report concludes with the presentation of the results
and observations.
Electronic Real Estate in Europe: Review and Contrast of the Approaches of Germany and United Kingdom
Page 12
2. Preliminary Context
2.1. Description of the German Territory and basic Characteristics
The country Germany compasses approx. 360,000 square kilometres (Country Watch,
2007). Situated in the middle of Europe, Germany borders the Baltic Sea and the North
Sea, between the Netherlands and Poland, in the south of Denmark; the other border
countries are Austria, Belgium, Switzerland, Czech Republic, France and Luxembourg
(Central Intelligence Agency, 2007).
German population ranges around 83 million as of 2006. The capital and simultaneous
the largest city is Berlin with about 3.5 million inhabitants (Country Watch, 2007).
Germany is composed of sixteen federal states and with a density of 230hab/km², one
of the most densely populated countries in the world (Statistisches Bundesamt
Deutschland, 2005).
The German gross domestic product amounts almost 2 trillion in 2006 and is the
third largest economy in the world. The GDP grew 1% in 2005 and 2.2% in 2006. The
labour market conditions are difficult and creation of new jobs stagnates due to high
regulatory hurdles. The unemployment rate is around 11.7% 2003 and 2004, and
12.9% in 2005.
2.2. The German Real Estate Market Situation and Development
2.2.1. Market Situation
In Germany are around 40 million accommodation units. 47% of the gross properties
of private households are in residential buildings. The living space per inhabitant is
41m² in West Germany, in East Germany today 38m² after 27m² in 1990. 70% of the
accommodation units were built after the Second World War and almost 50% of all
flats are in buildings with one or two flats. Just 10.5% are located in buildings with
more than thirteen units. The home ownership rates in Germany are the lowest of all
industrial countries. 45% in West Germany and 35% in East Germany are among the
European average (Walter & Just, 2006).
Electronic Real Estate in Europe: Review and Contrast of the Approaches of Germany and United Kingdom
Page 13
Moreover, Gondring (2006) stresses, that in the international contrast the ownership
rates are low, even though empiric surveys show that over 57% of the tenants prefer
home ownership just 42.8% of German households live in ownership.
In comparison to other countries in Europe like Sweden the profitability of German
private real estate remained constant while the profitably in Sweden explicitly de-
creased. That acknowledges the stability of the German real estate market.
The real estate stock in Germany increased about 2% between 2005 and 2007. This
corresponds to the European average (Just, 2005).
2.2.2. Price and Transaction Development
The German real estate market is considered underdeveloped. In comparison to other
European countries Germany shows backlog demand. Prices of houses and flats have
decoupled themselves from the international uptrend. Concerning the EU states like
France and Spain the price of houses increased by double-digit percentages. In Italy
the average increase of real estate prices was 9% p.a., while in Germany the prices
stagnated on the level of the 90's (Gondring, 2006).
Regarding the transactions Anglo-Saxon buyers are dominating the German real estate
market. Since 1999 Anglo-Saxon investors bought approximately 650,000 accommoda-
tion units. In most cases they bought huge portfolios.
The depressing price development of the market is shown in Figure 1. Portfolio rentals
are increasing fractionally and rentals of new buildings are stagnating. Prices for con-
dominiums decreased over the last years (Walter & Just, 2006).
Electronic Real Estate in Europe: Review and Contrast of the Approaches of Germany and United Kingdom
Page 14
Figure 1 Prices in % compared to previous year (Walter & Just, 2006)
According to Walter & Just (2006), the prices will grow at most moderate. In many
places the market will stagnate. As a result of the new social system Hartz IV, the de-
mand for smaller flats increased. According to the demographic trends in Germany the
population shrinks. Parallel the demand for new real estate decreases.
2.2.3. Internet Development and eCommerce
Between 1997 and 2005 the people who used Internet in Germany has been multiplied
by ten (Figure 2). In 2005 from the number of users were 37.5 million older than four-
teen years. This conforms to 57.9% of the population. The development of Internet
distribution increased continuously strong between 1997 and 2005. Averaged more
men than women use the Internet but in the younger target groups the rate is almost
balanced (51% men, 49% women).
-6
-4
-2
0
2
4
6
8
10
12
14
1991
1994
1997
2000
2003
2006
Price Condo (Portfolio)
Price Condo (New Building)
Rental (Portfolio)
Electronic Real Estate in Europe: Review and Contrast of the Approaches of Germany and United Kingdom
Page 15
Figure 2 - German Internet User in Millions (ARD, 2005)
Online trade might have high impact on retail trade surfaces on a long-term basis. The
eCommerce conversions in the here relevant B2C-Business grow in Germany very
strong from a very small level (2000: about EUR 2 billion). The clientele and thus the
offer in the Internet extended substantially, the majority of the Internet users utilize
however the medium at present mainly to the information search. Long-term it is to be
expected that for instance a tenth of the German conversions takes place ,,online".
With a just moderate growth in the German retail trade altogether the conversions in
the B2C-Geschäft to 2010 should have exceeded the border of EUR 100 billion
(Mitropoulos, Siegel, & Funk, 2001).
2.3. Description of the United Kingdom Territory and basic Characteristics
The United Kingdom is the second largest economy of the European Union and the
fourth largest economy in the world. England as a part of the United Kingdom is lo-
cated in the South East, bordering Scotland and Wales. As an element of Western
Europe, the United Kingdom is 35km north of France, separated by the English Channel
(Datamonitor, 2006).
United Kingdom has an area of approx. 245,000 sq km. The population is around 61
million habitants, whereas 50 million people live in England. The density amounts
0
5
10
15
20
25
30
35
40
1997 1998 1999 2000
Electronic Real Estate in Europe: Review and Contrast of the Approaches of Germany and United Kingdom
Page 15
Figure 2 - German Internet User in Millions (ARD, 2005)
Online trade might have high impact on retail trade surfaces on a long-term basis. The
eCommerce conversions in the here relevant B2C-Business grow in Germany very
strong from a very small level (2000: about EUR 2 billion). The clientele and thus the
offer in the Internet extended substantially, the majority of the Internet users utilize
however the medium at present mainly to the information search. Long-term it is to be
expected that for instance a tenth of the German conversions takes place ,,online".
With a just moderate growth in the German retail trade altogether the conversions in
the B2C-Geschäft to 2010 should have exceeded the border of EUR 100 billion
(Mitropoulos, Siegel, & Funk, 2001).
2.3. Description of the United Kingdom Territory and basic Characteristics
The United Kingdom is the second largest economy of the European Union and the
fourth largest economy in the world. England as a part of the United Kingdom is lo-
cated in the South East, bordering Scotland and Wales. As an element of Western
Europe, the United Kingdom is 35km north of France, separated by the English Channel
(Datamonitor, 2006).
United Kingdom has an area of approx. 245,000 sq km. The population is around 61
million habitants, whereas 50 million people live in England. The density amounts
1999 2000 2001 2002 2003 2004 2005
Internet User in Millions
Electronic Real Estate in Europe: Review and Contrast of the Approaches of Germany and United Kingdom
Page 15
Figure 2 - German Internet User in Millions (ARD, 2005)
Online trade might have high impact on retail trade surfaces on a long-term basis. The
eCommerce conversions in the here relevant B2C-Business grow in Germany very
strong from a very small level (2000: about EUR 2 billion). The clientele and thus the
offer in the Internet extended substantially, the majority of the Internet users utilize
however the medium at present mainly to the information search. Long-term it is to be
expected that for instance a tenth of the German conversions takes place ,,online".
With a just moderate growth in the German retail trade altogether the conversions in
the B2C-Geschäft to 2010 should have exceeded the border of EUR 100 billion
(Mitropoulos, Siegel, & Funk, 2001).
2.3. Description of the United Kingdom Territory and basic Characteristics
The United Kingdom is the second largest economy of the European Union and the
fourth largest economy in the world. England as a part of the United Kingdom is lo-
cated in the South East, bordering Scotland and Wales. As an element of Western
Europe, the United Kingdom is 35km north of France, separated by the English Channel
(Datamonitor, 2006).
United Kingdom has an area of approx. 245,000 sq km. The population is around 61
million habitants, whereas 50 million people live in England. The density amounts
Internet User in Millions
Electronic Real Estate in Europe: Review and Contrast of the Approaches of Germany and United Kingdom
Page 16
117hab/km² and the population growth rate is 0.275%. Capital of England and the
United Kingdom is London with 7.6 million inhabitants (Greater London) (Central
Intelligence Agency, 2007).
Moreover, United Kingdom is an important European economic power. The gross do-
mestic product was almost 1.5 trillion in 2006 and the real growth rate amounts
2.7%. Regarding the unemployment rate in 2006 it was 2.9% and the export rate was
351 billion in 2006 (Central Intelligence Agency, 2007).
Electronic Real Estate in Europe: Review and Contrast of the Approaches of Germany and United Kingdom
Page 17
2.4. The United Kingdom Real Estate Market Situation and Development
2.4.1. Market Situation
The United Kingdom is Europe's largest real estate exchange. The investment market is
estimated at the end of 2003 at £ 265 billion and it has recently seen its fair share of
what US Federal Reserve Board Chairman Alan Greenspan called in a different context
"irrational exuberance" with, for example, record levels of highly leveraged "buy to let"
residential investment by private investors (Cookson, 2006).
According to Dixon (2005), the real estate sector in the European Union comprised
about 755,000 companies with 1.7 million employees. In the United Kingdom the sec-
tor has 68,000 enterprises and 371,000 employees and a turnover of £ 31 billion.
The proprietary ratio, i.e. the portion of households who live in their own flats in
United Kingdom, is 72%. Therewith United Kingdom is beside Spain the leader in
Europe.
Furthermore, the profitability of the British real estate market is explicitly decreased.
This demonstrates a certain amount of instability of the market (Gondring, 2006).
Regarding the real estate stock, it increased between 2005 and 2007 about 2.2%. This
figure matches almost with the German market and the other countries of Western
Europe (Just, 2005).
2.4.2. Price and Transaction Development
The real estate prices in United Kingdom increased tremendously since the 90's (Figure
3). In the beginning of 1995 the average house costs were around £ 51,000. Until the
beginning of the year 2000 the prices climbed to £ 77,000. Today some middle-sized
houses are sold for £ 150,000. Hence, the average growth rate over the last seven
years was over 17% p.a. One can assume that this development is probably an over-
statement and that therefore a heavy correction of the market is the consequence
(Just & Hunter, 2004). According to Just (2005), many houses are overestimated by 20
30%.