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21 – 30 of over 9000Hassanudin Mohd Thas Thaker, Mohamed Ariff and Niviethan Rao Subramaniam
The purpose of this paper is to identify the drivers of residential price as well as the degree co-movement of housing among different states in Malaysia.
Abstract
Purpose
The purpose of this paper is to identify the drivers of residential price as well as the degree co-movement of housing among different states in Malaysia.
Design/methodology/approach
This study adopted an advanced econometrics technique: the dynamic autoregressive-distributed lag (DARDL) and – the time-frequency domain approach known as the wavelet coherence test. The DARDL model was applied to identify the cointegrating relationships and the CWT was used to analyze the co-movement and lead–lag relationships among four states’ regional housing prices. The extracted data were mainly on annual basis and comprised macroeconomics and financial factors. Information with regard to residential prices and other variables was extracted from the National Property Information Centre (NAPIC) website, the Central Bank of Malaysia Statistics Report, the Department of Statistics, Malaysia, I-Property.com and the World Bank (WB). The data covered in this study were the pool data from four main states in Malaysia and different categories of residential properties.
Findings
The empirical results indicate that there were long-run cointegration relationships between the housing price and capital gain and loss, rental per square feet, disposable income, inflation, number of marriages, deposit rate, risk premium and loan-to-value (LTV) ratio. While the wavelet analysis shows that (1) in the long run, Kuala Lumpur housing price having strong co-movement with Selangor, Penang and Melaka housing prices except for Johor and (2) the lead–lag relationship also postulates Kuala Lumpur housing price having in-phase category with Selangor, Penang and Melaka housing prices except for Johor.
Practical implications
This study offers relevant practical implications. First, the study proposes an active collaboration between the private sector and government support which may help to smooth the pricing issue of residential properties. More low-cost residential projects are needed for focus groups including middle- and low-income earners. Furthermore, the results are expected to provide real estate investor in Malaysia, an improved understanding of the regional housing market price dynamics.
Originality/value
The findings of this study were obtained from various reliable sources; therefore, the results reflected the analysis of price drivers and co-movements. Furthermore, findings from this study lend some support to the argument on the rise of residential prices and offer several policy implications from a practical point of view with regard to the residential market.
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Nurudeen Akinsola Bello, Bawa Chafe Abdullahi, Moses Idowu Atilola and Esther Oromidayo Thontteh
This study aims to review the approaches used in the analysis of rental income of residential property in Abuja, Nigeria, to strengthen the existing investment performance…
Abstract
Purpose
This study aims to review the approaches used in the analysis of rental income of residential property in Abuja, Nigeria, to strengthen the existing investment performance approaches initially relied upon by property investors towards having a better and reliable performance evaluation for property investment decision-making.
Design/methodology/approach
With the adoption of combined methodological approaches, quantitative data on rental history (2006–2016) were collected on the randomly selected residential investment properties (block of flats) available in the portfolio of estate surveying firms in the different locations/sub-markets of the study area. Data collected were analysed with the frequency mean and growth rate.
Findings
All the methodological approaches adopted for analysis displayed varying performance results. No particular sub-market maintains the same ranking position in any of the approaches. The developmental phases previously used as an indication of yield in the study area do not correspond with the status of rental income of sub-markets. Yield has been observed to be a mere attraction to property investment; it does not translate to income growth. Mean income (though a good indicator of changes in rental income) is not a reliable indicator of growth in income, and growth in the rate of income omitted the changes in rental income during the holding period.
Research limitations/implications
The study was restricted to historical rental income data on a block of flat-type residential property, and it does not include capital value analysis or inquire into the factors responsible for variation in rental income during the study period. The outcome of this study is only applicable to a block of 4 number three-bedroom flats residential property type.
Practical implications
Multiple simple methods of analysing rental income performance should be preferred to the single complex method. This will simplify investors’ rental income characteristics of investment towards a better understanding of rental property investment analysis. That rental value appreciates with time does not translate to an increase in the actual rental income of residential investment property.
Social implications
Through these performance approaches, ranking of the sampled properties in the study area sub-markets will enhance investors’ traditional diversification planning across the study area for an enhanced combination that can achieve latent profitability. The attention of investors is hereby called to these multiple approaches to enable them to merge their investment objectives with any or a combination of these approaches towards making rational investment decisions.
Originality/value
This seems to be the first advocacy for methodological paradigm shift applicable to direct residential property investment performance in Nigeria, using transaction rather than appraisal data.
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The purpose of this study is to reveal the dynamics of house prices and sales in spatial and temporal dimensions across British regions.
Abstract
Purpose
The purpose of this study is to reveal the dynamics of house prices and sales in spatial and temporal dimensions across British regions.
Design/methodology/approach
This paper incorporates two empirical approaches to describe the behaviour of property prices across British regions. The models are applied to two different data sets. The first empirical approach is to apply the price diffusion model proposed by Holly et al. (2011) to the UK house price index data set. The second empirical approach is to apply a bivariate global vector autoregression model without a time trend to house prices and transaction volumes retrieved from the nationwide building society.
Findings
Identifying shocks to London house prices in the GVAR model, based on the generalized impulse response functions framework, I find some heterogeneity in responses to house price changes; for example, South East England responds stronger than the remaining provincial regions. The main pattern detected in responses and characteristic for each region is the fairly rapid fading of the shock. The spatial-temporal diffusion model demonstrates the presence of a ripple effect: a shock emanating from London is dispersed contemporaneously and spatially to other regions, affecting prices in nondominant regions with a delay.
Originality/value
The main contribution of this work is the betterment in understanding how house price changes move across regions and time within a UK context.
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Martin Hoesli and Richard Malle
The article aims to analyze the behavior of commercial real estate prices in Europe, with a focus on the post-coronavirus disease 2019 (COVID-19) pandemic period. The authors use…
Abstract
Purpose
The article aims to analyze the behavior of commercial real estate prices in Europe, with a focus on the post-coronavirus disease 2019 (COVID-19) pandemic period. The authors use national and city-level data for the various commercial real estate sectors in ten countries, as well as listed real estate data, to assess any differences across property type and space.
Design/methodology/approach
The authors analyze the behavior of commercial real estate prices after the COVID-19 pandemic, emphasizing differences across property types. For that purpose, the authors use national and city-level direct real estate data for the ten largest countries in terms of market capitalization, as well as listed real estate data. The article then turns to discussing the likely trajectory of commercial real estate prices in the future.
Findings
The recent rise in interest rates and geopolitical instability have affected prices differently across sectors. Industrial properties benefited from the pandemic, although prices declined significantly in 2022. Residential properties continued their upward price trend and have been the best-performing property type during the last two decades. Retail real estate continued its downward price trajectory. Thus far, office markets do not appear to be significantly affected by structural changes in the sector. The data for listed real estate markets in Europe suggest that markets bottomed out in early 2023.
Originality/value
This paper provides for a better understanding of the behavior of commercial real estate prices in Europe since the COVID-19 pandemic. The authors assess whether the effects found during the COVID-19 crisis were temporary or long-lasting. Also, many economic and political uncertainties have emerged since the beginning of the Ukraine war in February 2022, and it is important to analyze the effects of such uncertainties on commercial real estate prices.
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This paper aims to explore the relationship between market pricing and design quality within the development industry. Currently, there is a lack of research that examines real…
Abstract
Purpose
This paper aims to explore the relationship between market pricing and design quality within the development industry. Currently, there is a lack of research that examines real estate at the property level. Development quality is widely believed to have diminished over the past decades, while many investors seem uninterested in the design process. The study aims to address these issues through a pricing model that integrates design attributes. It is hoped that empirical findings will invite broader stakeholder interest in the design process.
Design/methodology/approach
The research establishes a framework for assessing spatial compliance across residential developments within London. Compliance is assessed across ten boroughs, with technical space guidelines used as a proxy for design quality. Transaction prices and spatial assessments are aligned within a hedonic pricing model. Empirical findings are used to establish whether undermining spatial standards presents a significant development risk.
Findings
Findings suggest a relationship between sale time and unit size, with “compliant” units typically transacting earlier than “non-compliant” units. Almost half of the 1,600 apartments surveyed appear to undermine technical guidelines.
Research limitations/implications
It is suggested that an array of design attributes be explored that extend beyond unit size. Additionally, future studies may consider the long-term implications of design quality via secondary transaction prices.
Practical implications
Practical implications include the development of a more scientific approach to design valuation. This may enhance the position of product design management within the development industry and architectural services.
Social implications
Social implications may include improvement in residential design.
Originality/value
An innovative approach combines a thorough understanding of both design and economic principles.
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Philip Britton and Julian Bailey
The purpose of this paper is to contrast consumer laws in England and Australia in relation to residential building projects, and considers how the laws of England may be improved…
Abstract
Purpose
The purpose of this paper is to contrast consumer laws in England and Australia in relation to residential building projects, and considers how the laws of England may be improved in light of the Australian laws.
Design/methodology/approach
The paper reviews consumer laws in both England and Australia, and examines the measures that are in place (or not) to protect consumers who engage builders or purchase a home that contains latent defects.
Findings
After comparing the laws of the two countries, the conclusion is made that English law could be improved by imposing regulations on builders, including by mandating the use of written contracts for building work which are required to contain particular terms, requiring builders to be licensed and insured, and by introducing a consumer‐friendly form of dispute resolution for home building disputes.
Practical implications
The paper recommends that there be law reform in England.
Originality/value
The paper provides (so far as the authors are aware) the first comparison of English and Australian consumer laws in relation to residential building work.
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Steven Devaney and David Scofield
Commercial real estate (CRE) is a major investment asset. Yet detailed information on the value of investible CRE in different cities is lacking. The authors propose an innovative…
Abstract
Purpose
Commercial real estate (CRE) is a major investment asset. Yet detailed information on the value of investible CRE in different cities is lacking. The authors propose an innovative method to measure the value of investible CRE using transaction datasets.
Design/methodology/approach
The authors take transaction prices and index them to produce a time series of values for each asset. The sum of the values at each point represents the value of investible CRE at that date. The authors’ method is applied to transaction data for New York, London and Toronto.
Findings
London had the highest proportions of institutional and foreign ownership, and its turnover was more resilient to the downturn in global CRE following the GFC. The results illustrate the potential of the authors’ method to shed light on the characteristics of investible CRE markets.
Research limitations/implications
The authors use data from Real Capital Analytics (RCA). This provides good coverage of transactions for investible CRE in the cities that the authors examine, but data from other sources might lead to different estimates.
Practical implications
Measuring the value and turnover of investible CRE is important for portfolio strategies that account for the size and liquidity of investment markets. Knowledge of these features, and of ownership patterns, provides a better understanding of market operation.
Originality/value
The authors’ modification of the perpetual inventory technique is simple, novel and practical. The authors propose this approach given the absence of a building-by-building inventory of investible CRE in many markets.
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The literature concerned with British regional housing markets has been relatively limited, especially in comparison to the research undertaken with regard to the commercial market…
Abstract
The literature concerned with British regional housing markets has been relatively limited, especially in comparison to the research undertaken with regard to the commercial market. This paper aims to redress the balance primarily in two areas. First, the performance of regional housing markets over the period 1983 to 1995 is assessed and compared to comparable returns from the commercial sector and the UK equity and bond markets. The second area of concern is the inflation hedging ability of these markets. While a large number of studies have examined the UK commercial sector, the residential market has been largely ignored. The paper examines the issue using the Ordinary Least Squares (OLS) regression model proposed by Fama and Schwert (1977) and also on a long‐term basis using cointegration techniques. The results are mixed, with some evidence that the residential market provides a hedge, but with little evidence that the commercial market provides protection against inflation. While no evidence was found that either property sector is cointegrated with inflation, there was some evidence of causal relationships. Additionally, in both the performance appraisal and in the inflation tests, substantial differences were found between different regional markets.
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The residential private rented sector (PRS) represents a major investment opportunity for individuals, corporates and institutions following the sector’s deregulation in 1988. Yet…
Abstract
The residential private rented sector (PRS) represents a major investment opportunity for individuals, corporates and institutions following the sector’s deregulation in 1988. Yet the sector retains historic perception problems by institutions. The development or expansion of a portfolio introduces a further range of costs and difficulties above those typically associated with acquisition in the commercial sector. Various mandatory and voluntary codes operate, acting as further regulatory factors. Difficulties with performance measurement, particularly indices, are highlighted and the applicability of financial market models is questioned.
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Neil Crosby, Anthony Lavers and John Murdoch
Examines the phenomenon of cross‐border property lending and some issues regarding lending procedures and decision‐making processes in the context of the relationship between…
Abstract
Examines the phenomenon of cross‐border property lending and some issues regarding lending procedures and decision‐making processes in the context of the relationship between lender and professional adviser. Commences by placing these procedures and processes in the context of the development of cross‐border European property investment and finance. The UK has been a popular destination for overseas investors and lenders over the last decade and is therefore used as a case study to examine the additional institutional risk that overseas lenders may face when operating outside of their own country and obtaining advice from home professionals. The research identified a lack of clarity in roles and relationships between lender and adviser, difficulties in communications both internally and between overseas branches and headquarters and failures in provision and interpretation of advice. Concludes by identifying the issues which may need to be addressed generally by lenders and their advisers, when lenders are operating in overseas markets.
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