Reed, R. (2023), "Editorial: Introduction from the Editor – IJHMA Vol. 16 No. 1", International Journal of Housing Markets and Analysis, Vol. 16 No. 1, pp. 1-4. https://doi.org/10.1108/IJHMA-01-2023-163
Emerald Publishing Limited
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Welcome to the first issue in the sixteenth volume of the International Journal of Housing Markets and Analysis. This issue contains 12 high-quality research papers that have passed through a rigorous review process. Each contributes substantially to increasing our knowledge about essential housing markets in both developed and developing countries, being country-specific analysis or collective country analysis. A core and unique strength of this journal is the diverse range of countries, markets and research methodologies enlisted to collectively analyse international housing markets rather than being limited to only developed or developing countries.
The first paper investigates potential negative impacts from COVID-19 on housing finance for homeownership relating to private sector employees in the Kingdom of Saudi Arabia (KSA). There have been few studies investigating private sector employees and housing finance regarding the purchase of houses and how the COVID-19 lockdowns affected their sources of income for loan repayment. The methodology used a phenomenology type of qualitative research where data was sourced from three cities in KSA and three mortgage banks. Interviews were conducted with relevant stakeholders including bankers, government agencies and private sector employees. This was followed by a thematic analysis with the data presented in themes. The findings confirmed that the partial and full lockdowns produced income irregularities in many private businesses. This resulted in some businesses downsizing which then led to large-scale unemployment, reduced half-monthly income for employees, loss of profit plus human resources wastage. Predominantly this was due to the economic shock with many homeowners unable to meet their monthly mortgage repayment obligations.
The second paper examines the integration of housing markets in Canada by analysing housing price data between 1999 and 2016 for metropolitan markets in six different provinces. This was undertaken with testing for co-integration, driver cities of long-run relationships, long-run Granger causality and instantaneous causality with reference to the timing of the global financial crisis (GFC). The methodology used Johansen’s system co-integration approach with structural breaks where moving average representation is used for common stochastic trend analysis. This was accompanied with vector error correction model-based Granger causality and instantaneous causality. The findings showed that housing prices in cities were in long-run equilibrium where the Canadian housing markets became more integrated following the GFC. The Calgary, Vancouver, Toronto and Montreal housing markets drive the Canadian housing market, leading all cities towards long-run equilibrium. Strong long-run Granger causality exists; however, no instantaneous causality was observed.
The third paper from the USA investigates potential causes of bankruptcy relating to hurricane damage. It investigates to what extent hurricanes result in personal bankruptcy filings due to real property damages. Data was examined on a state level for the independent variables although the hurricane damage must be financially significant in order for inland flooding to be both measurable and influential. The methodology is based on a lagged full modified ordinary least squares (FMOLS) model using data from states that suffered hurricane damage between 2000 and 2020. With this approach FMOLS controls for various financial distresses that can cause bankruptcy filings. The findings confirmed that a claim for bankruptcy was usually filed within one year of a hurricane event. Variations in house prices and hurricane severity were significant indicators of bankruptcy filings confirming that financial distress is highly correlated with whether a home was insured. However the divorce rate, commonly thought of as a primary reason for bankruptcy, was insignificant.
The fourth paper produces a systematic literature review (SLR) to identify and analyse current studies via factors that influence customers’ Islamic home financing selection and Islamic banking product preferences. The methodology focussed on the SLR which was undertaken using a four-step Reporting Standard for the Systematic Evidence Syntheses review method, namely, research question formulation, systematic searching, quality assessment and then data extraction. The findings showed the relevant factors could be categorised into four primary themes being consumer behaviour, consumer attributes, bank attributes and then bank attributes (Islamic). The themes were then divided into 16 sub-themes where all factors proved essential for consumers’ evolving preferences and product competitiveness in the market. The findings also provided important insights by identifying factors that should be prioritised by financial institutions when analysing consumer behaviour.
The fifth paper from Malaysia examines the relationship between macroeconomic factors and housing prices between 1991 and 2016. This paper is argued as the first to simultaneously use the ARDL and the VECM models to analyse the relationship between macroeconomic variables and house prices. The methodology constructed a model with house prices as the dependent variable and other variables, namely, interest rate, the gross domestic product (GDP) and the consumer price index (CPI), as the explanatory or regression variables. The bounds tests for co-integration and VECM were also used. The findings confirmed a positive equilibrium relationship in the long run between GDP, interest rate and housing prices although was observed as negative for the CPI. In the short run, the housing prices were shown to have a negative relationship with GDP and the interest rate however recorded a positive relationship with the CPI when controlling for all other variables.
The sixth paper investigates the potential long-term impact of working from home upon housing wealth inequality for large cities in developed countries. The findings showed that due to the unique nature of the COVID-19 crisis there was a different and long-term impact on housing wealth inequality. Changes in the working arrangements of many professionals altered the housing demand dynamic across different suburbs and this may lead to a reduction of the housing wealth gap in the long term. The outcomes from the paper identified five channels that could potentially reduce housing wealth inequality.
The seventh paper from Turkey examines housing prices and rent dynamics for seven large cities. It also examines bubble dynamics within the price convergence framework using alternative tests. The methodology includes two ARDL co-integration estimates for housing prices and rents based on a monthly data set between 2003 and 2019. This is followed by the application of conditional ECM to investigate the long-run drivers. It then compares ARDL co-integration forecasts and DCF estimates with actual prices to determine the timing, magnitude and collapse period of bubbles within the price convergence framework. The findings provide supporting evidence that the price-to-rent ratio and rents are the fundamental determinants in the decision to buy a new house since rents directly increase the level of monthly real estate investment returns. Another key finding was that these dynamics have a larger impact on house prices than mortgage rates.
The eighth paper analyses the relationship between housing prices and the inflow of foreign capital in Pakistan. Currently, there is a shortage of housing units in this country due to rising population and rural urban migration, as well as a lack of finance for housing. The data covered the period from 1973 to 2018 based on an annual, quarterly and monthly basis with structural changes captured by the Zivot Andrews unit root test. This was also accompanied by the Gregory Hansen test for co-integration where the combined co-integration was used as validation. In addition, a rolling window was used to capture timely changes between data sets with wavelet analysis used to confirm volatility. The findings confirmed the level of rising prices of housing has been alarming, The rolling window regression model confirmed that domestic factors along with the foreign capital inflow affected housing prices positively. In addition, the wavelet analysis showed that foreign direct investment is more volatile than workers’ remittances in financing the housing market.
The ninth paper compares the perceived safe haven properties of different asset markets such as gold, dollar, oil and the disaggregated real estate sector (house, plot and residential) against equity returns in Pakistan. The methodology used wavelet coherence to analyse the dependence and correlation of asset classes based on data between 2011 and 2020 on a monthly basis. It also questioned the potential for diversification at the tail of returns distribution by applying a wavelet value-at-risk (VaR) framework. The findings from the wavelet VaR confirmed that the degree of co-movement between gold and equity returns greatly affected the portfolio risk, then followed by residential property and oil. These results will assist stakeholders including individual investors, fund managers and financial advisors seeking an optimal portfolio combination that hedges excessive negative movements in equity returns subject to the heterogeneity in the investment horizon.
The tenth paper from China focused on the role of gender and marital status in homeownership. It also investigated other determinants of homeownership and heterogeneity in factors related to homeownership between single women and single men. It investigated the role that gender and marital status play in homeownership, being one of the most important attributes for Chinese families. This study was restricted to urban residents by excluding respondents who responded they have agriculture hukou. These findings confirmed that never married women are less likely to own a house compared to both married couples and never married men. Individual characteristics, such as financial assets ownership, car ownership, income, education level and Hukou status, are significant determinants that affect an individual’s decisions regarding home ownership. It should be noted that different factors contributed to homeownership in comparison between the never married women cohort and the never married men cohort.
The eleventh paper examines to what extent, if any, that house price movements in the UK could be linked to the political cycle because homeowners represent a large proportion of the voter base and their voting patterns may be influenced by the magnitude and direction of house price variations. Therefore the paper investigates whether house prices behave differently before and after elections and under different political regimes. The methodology is based on analysing quarterly house price data as well as data about UK parliamentary elections between 1960 and 2018. Descriptive statistics and significance tests are used. The findings showed that although there is no evidence that house prices in the UK performed significantly differently under various political parties, it was observed that house prices performed much better in the year preceding an election in comparison to the year following an election. On average house prices increased by 5.3% per annum in the year preceding an election compared to 1.3% per annum in the year following an election. It was argued that the political cycle is given adequate consideration when undertaking residential property investment decisions.
The final paper examines the nonlinear relationship between tourism development and housing prices. It also investigates the role of economic growth in facilitating the growth of the tourism development and housing prices nexus in G7 countries. The methodology used the econometric technique panel smooth transition regression model with two regimes based on annual panel data between 1995 and 2018. The findings confirmed that the nexus between tourism development and housing prices is non-linear and regime dependent. Furthermore, the results identified the threshold level of economic growth above which tourism development increases the housing prices as 2.63%. The economic growth and housing prices also displayed a U-shape relationship implying that at a certain level increase in economic growth decreases the housing prices. However, after a certain level an increase in economic growth increases the level of housing prices.
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