Skanska Hus Väst is planning to construct condominiums in an area called Ärtan which lies in Karlstad, in the city district of Romstad. To be able to construct condominiums in this area a market analysis is needed. The market analysis describes the most appropriate type of residence to construct depending on ground conditions, public demand, the surrounding buildings and environment, the pattern in which the inhabitants move in the rural- and in the city district and how much the customer is willing to pay for a condominium on Ärtan. This means that relevant statistics of income, employment, prices on equal objects and more is needed to forecast the housing- and property market.
The first part in the project development of Ärtan is to make a market analysis. The market analysis includes the city analysis, the object analysis and the business intelligence, figure 2.
The business intelligence is not included because the report is demarcated to the city- and object analysis only. The city- and object analysis will result in the determination of a suitable target group and how much the customer will be willing to pay for a condominium in Ärtan. The purpose of this study is to determine these two and also decide the methods most appropriate for analyzing and determining the will of payment for the project.
Business intelligence
MARKET ANALYSIS
City analysis
Object analysis
A short description of the city
Business sector and employment
Housing - and property market
Population
Supply and demand
The state of the Property market
A short description of the object
Location analysis
Equal objects
Incomes and profitability
Figure 2. Layout of the market analysis.
The methods used for analyzing and making a conclusion in the report are:
- Tobins Q
- Business sector specialization quota
- Regression analysis
- Multiple Regression analysis
- The method of location and price (Ortprismetoden)
- Demand with the help of elasticity's.
With these methods and with a great amount of collected data we have drawn the conclusion that the conditions for constructing condominiums in Ärtan are not optimal but still profitable. We have tried to make this judgment as objective as possible and we have looked at all the advantages and disadvantages of the area. Karlstad's business sector and employment have increased during the last years and are displaying good conditions to withstand these troubling financial times.
We found good conditions to invest in the real estate market in Romstad, due to the lack of condominiums in the area and due to a higher level of incomes compared to the rest of the inhabitants of Karlstad.
After the traces from the financial crises we assess that the will of payment on condominiums on Ärtan should be about 22 000 Swedish kronor/m2 (living area) in the interval of 20 500 - 23 000 Swedish kronor/m2 (living area). Suitable target groups for the product are people which have a good and firm will of payment and are in their thirties or forties. A good thing to do is also to adjust parts of the condominiums for older inhabitants. Our opinion is that a mix of younger and older people creates charm, comfort and a sense of safety in the neighborhood which is needed to get the area more attractive on the market.
All the methods that were used in this analysis showed similar results which led us to the conclusion that all of the methods used are suitable for this assignment. However, the combination of the multiple regression analysis and the brokers' opinions is the most suitable one for the assignment because the combination can be executed easy, swift and true.