A critique of a local property forecasting model

This paper critically evaluates a model produced by the Department of Land Economy and PA Cambridge Economic Consultants which forecast demand and supply floorspace changes in Kent's commercial property markets. First, it sets out the conceptual framework adopted, and then how floorspace-demand forecasts were constructed and compared to the supply pipeline for each sub-region in Kent. Second, it considers the problems of measuring the selected variables and predicting future changes, in particular the way gross domestic product is measured and projected forward; the reliability of floorspace/employment ratios; and how to distinguish new build requirements from net change in stock. It concludes that the assumptions concerning future changes in these key relationships are fundamental to the accuracy of this type of forecasting model, and that qualitative research may improve our understanding of these relationships.