How accurate is the Cap Rate calculation in the Property Price Indexes?
Answer:
Cap rate accuracy depends on the correctness of two inputs: median rent (AED/sqm/year) and median sale price (AED/sqm).
1) Full-universe filtering: all relevant transactions are included.
2) Medians instead of means: reduces outlier influence.
3) Granularity: calculations are done per level and segment.
4) Cap Rate formula: Cap Rate = (Rent ÷ Sale) × (1 − x) × 100%.
5) Financial precision: reported to two decimal places.
6) Data sources: verified Dubai Pulse Sales Transactions and Rent Contracts ensure maximum accuracy.
1) Full-universe filtering: all relevant transactions are included.
2) Medians instead of means: reduces outlier influence.
3) Granularity: calculations are done per level and segment.
4) Cap Rate formula: Cap Rate = (Rent ÷ Sale) × (1 − x) × 100%.
5) Financial precision: reported to two decimal places.
6) Data sources: verified Dubai Pulse Sales Transactions and Rent Contracts ensure maximum accuracy.