An econometric analysis and forecasts of the office rental cycle in the Dublin area

This paper presents an econometric investigation of office rent determination in Dublin, a small European market, over the twenty eight year period 1970-1997. Using a single equation specification based on demand and supply interactions, changes in real GDP lagged one period and changes in the office stock lagged three periods were found to be the most important determinants of changes in real rents in this market. When the forecasting adequacy of the estimated model was tested and compared with forecasts derived from commonly used alternative statistical methodologies, the forecasts based on the estimated model outperformed the alternatives.