Cyclicity of real estate-related trends: topic modelling and sentiment analysis on German real estate news

• Published in: Journal of European real estate research Vol. 14; no. 3; pp. 381 - 400
• Main Authors: Ploessl, Franziska, Just, Tobias, Wehrheim, Lino
• Format: Journal Article
• Language: English
• Published: Bingley Emerald Publishing Limited 20-10-2021; Emerald Group Publishing Limited
• Subjects: Capital markets; Dictionaries; Investor behavior; Media coverage; Narratives; Noise; Semantics; Sentiment analysis; Trends; Sentiment analysis; Textual analysis; Topic modelling; Word embeddings; Trend analysis; Machine learning
• ISSN: 1753-9269; 1753-9277
• DOI: 10.1108/JERER-12-2020-0059

PurposeThe purpose of this paper is to identify and analyse the news coverage and sentiment of real estate-related trends in Germany. Trends are considered as being stable and long-term. If the news coverage and sentiment of trends underlie cyclicity, this could impact investors’ behaviour. For instance, in the case of increased reporting on sustainability issues, investors may be inclined to invest more in sustainable buildings, assuming that this is of growing importance to their clients. Hence, investors could expect higher returns when a trend topic goes viral.Design/methodology/approachWith the help of topic modelling, incorporating seed words partially generated via word embeddings, almost 170,000 newspaper articles published between 1999 and 2019 by a major German real estate news provider are analysed and assigned to real estate-related trends. Through applying a dictionary-based approach, this dataset is then analysed based on whether the tone of the news coverage of a specific trend is subject to change.FindingsThe articles concerning urbanisation and globalisation account for the largest shares of reporting. However, the shares are subject to change over time, both in terms of news coverage and sentiment. In particular, the topic of sustainability illustrates a clearly increasing trend with cyclical movements throughout the examined period. Overall, the digitalisation trend has a highly positive connotation within the analysed articles, while regulation displays the most negative sentiment.Originality/valueTo the best of the authors’ knowledge, this is the first application to explore German real estate newspaper articles regarding the methodologies of word representation and seeded topic modelling. The integration of topic modelling into real estate analysis provides a means through which to extract information in a standardised and replicable way. The methodology can be applied to several further fields like analysing market reports, company statements or social media comments on real estate topics. Finally, this is also the first study to measure the cyclicity of real estate-related trends by means of textual analysis.