Identification and management of emerging vulnerabilities in the real estate sector through the real estate rating terminal

Abstract

Given the importance of the real estate sector in the creation of economic activity in a country, it is necessary to control the vulnerabilities that may compromise its normal functioning. To the traditional risks that affect the real estate sector: rate increases, economic decline, labour market, etc., new ones are added, such as climate and other types of physical risks, which are increasingly topical in all areas of the economy. This highlights the need to have not only risk indicators that can anticipate unwanted situations, but also tools that allow the management of these indicators and the information required to treat them appropriately. In recent times, many investors in the real estate sector have seen their property portfolios affected due to extreme weather conditions. This new type of risk indicator is increasingly important as necessary information for decision making in real estate businesses. This work analyses the developments that have arisen in a real estate rating terminal as a tool for the management of all types of real estate risks and risk-based asset rating, making special mention of these latest risks.