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Article
Publication date: 13 February 2023

Yasmine Essafi Zouari and Aya Nasreddine

Over a long period, even low inflation has an impact on portfolio value and households’ purchasing power. In such a context, inflation hedging should remain an important issue for…

Abstract

Purpose

Over a long period, even low inflation has an impact on portfolio value and households’ purchasing power. In such a context, inflation hedging should remain an important issue for investors. In particular, long-term investors, who are concerned with the protection of their wealth, seek to hold effective hedging assets. This study aims to demonstrate that residential assets in “Grand Paris” are a hedge against inflation and particularly against its unexpected component.

Design/methodology/approach

In this study, the physical residential markets in 127 communes in Paris and the Parisian first-ring suburbs are considered as potential asset classes. We simplified the analysis by clustering the 127 communes into five homogenous groups using ascending hierarchical classification (AHC). Then, we test the hedging ability of these groups within a mixed asset portfolios using both correlation and regression analysis.

Findings

This paper presents an analysis of the “Grand Paris” housing market and its inflation hedging ability with comparison to other financial asset classes. Results show that the five housing groups act as a highly positive hedge against unexpected inflation. Furthermore, cash and bonds seem to provide, respectively, a partial and an over hedge against unexpected inflation. Stocks act as a perverse hedge against unexpected inflation and provide no significant hedge against expected inflation. Also, indirect listed real estate demonstrates little correlation with inflation, which makes us reject its hedging ability contrary to physical residential real estate.

Research limitations/implications

The inflation topic: although several researches exist that question the hedging property of real estate, very few concentrate on physical residential assets and to the best of the authors’ knowledge, this study is the only one that targets the “Grand Paris” area. Residential assets of the “Grand Paris” communes are confirmed to be a hedge against inflation and particularly against its unexpected component thanks to its capital appreciation rather than income one. Also, we show that the listed real estate in France (Sociétés d’Investissement Immobilier Cotée) does not provide the same hedging properties contrary to the US real estate investment trusts (REITs) who demonstrate this ability. Listed real estate could thus not be used interchangeably with housing to protect from inflation in the French market.

Practical implications

Protection of investors against inflation and in particular in the face of its return to France in 2022. Reassuring promoters and investors of the interest of residential investment projects in “Greater Paris” and of the potential that this holds.

Social implications

Inflation takes a chunk out of the purchasing power of money and thereby erodes the real value of people’s finance. Investors and households who seek protection from inflation erosion should invest in direct housing, and in particular within areas that are experiencing an effective metropolization process.

Originality/value

The originality of the study is precisely relative to the geographical area studied. The latter has experienced favorable economic conditions for several years and offers interesting fundamentals to explore and exploit in investment strategies that prove capable of protecting against imminent inflation. The database is specific to this project and has been built through the compilation of several sources and with the support of BNP Paribas Real Estate.

Details

International Journal of Housing Markets and Analysis, vol. 17 no. 3
Type: Research Article
ISSN: 1753-8270

Keywords

Article
Publication date: 14 December 2022

Cassandra Caitlin Moore

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.

Details

International Journal of Housing Markets and Analysis, vol. 17 no. 3
Type: Research Article
ISSN: 1753-8270

Keywords

Article
Publication date: 15 December 2022

Mumtaz Ali, Ahmed Samour, Foday Joof and Turgut Tursoy

This study aims to assess how real income, oil prices and gold prices affect housing prices in China from 2010 to 2021.

Abstract

Purpose

This study aims to assess how real income, oil prices and gold prices affect housing prices in China from 2010 to 2021.

Design/methodology/approach

This study uses a novel bootstrap autoregressive distributed lag (ARDL) testing to empirically analyze the short and long links among the tested variables.

Findings

The ARDL estimations demonstrate a positive impact of oil price shocks and real income on housing market prices in both the phrases of the short and long run. Furthermore, the results reveal that gold price shocks negatively affect housing prices both in the short and long run. The result can be attributed to China’s housing market and advanced infrastructure, resulting in a drop in housing prices as gold prices increase. Additionally, the prediction of housing market prices will provide a base and direction for housing market investors to forecast housing prices and avoid losses.

Originality/value

To the best of the authors’ knowledge, this is the first attempt to analyze the effect of gold price shocks on housing market prices in China.

Details

International Journal of Housing Markets and Analysis, vol. 17 no. 3
Type: Research Article
ISSN: 1753-8270

Keywords

Abstract

Details

Understanding Financial Risk Management, Third Edition
Type: Book
ISBN: 978-1-83753-253-7

Article
Publication date: 19 December 2022

Xiaojie Xu and Yun Zhang

Understandings of house prices and their interrelationships have undoubtedly drawn a great amount of attention from various market participants. This study aims to investigate the…

Abstract

Purpose

Understandings of house prices and their interrelationships have undoubtedly drawn a great amount of attention from various market participants. This study aims to investigate the monthly newly-built residential house price indices of seventy Chinese cities during a 10-year period spanning January 2011–December 2020 for understandings of issues related to their interdependence and synchronizations.

Design/methodology/approach

Analysis here is facilitated through network analysis together with topological and hierarchical characterizations of price comovements.

Findings

This study determines eight sectoral groups of cities whose house price indices are directly connected and the price synchronization within each group is higher than that at the national level, although each shows rather idiosyncratic patterns. Degrees of house price comovements are generally lower starting from 2018 at the national level and for the eight sectoral groups. Similarly, this study finds that the synchronization intensity associated with the house price index of each city generally switches to a lower level starting from early 2019.

Originality/value

Results here should be of use to policy design and analysis aiming at housing market evaluations and monitoring.

Details

International Journal of Housing Markets and Analysis, vol. 17 no. 3
Type: Research Article
ISSN: 1753-8270

Keywords

Book part
Publication date: 13 May 2024

Fisnik Morina, Albulena Syla and Sadri Alija

Purpose: This study analyses how investments and specific financial factors affect the financial performance of businesses in Kosovo. Exploring the relationship between…

Abstract

Purpose: This study analyses how investments and specific financial factors affect the financial performance of businesses in Kosovo. Exploring the relationship between investments and financial performance and their impact on performance volatility, performance is assessed using return on assets (ROA) and return on equity (ROE) investments.

Methodology: Quantitative methods using secondary data from audited financial statements of Kosova manufacturing and commercial enterprises cover a 3-year period (2019–2021), involving 40 enterprises with 120 observations. Statistical tests such as descriptive statistics, correlation analysis, linear regression, Hausman–Taylor regression, fixed effects, random effects, and generalised estimating equations (GEE) model are applied. The study also utilises ARCH–GARCH analysis to assess the relationship between investments and performance volatility.

Findings: Investments positively impact the financial performance of Kosova businesses and significantly reduce performance volatility. Long-term liabilities, retained earnings, and short-term liabilities also play a role in reducing asset return volatility, while cash flow from financial activities increases it. Investments, cash flows from financial activities, long-term liabilities, short-term liabilities, retained earnings, and solvency affect equity return volatility.

Practical Implications: The study sheds light on how investments and financial factors influence the financial performance and volatility of Kosova businesses. Policymakers can use these insights to create policies that foster the development of commercial and manufacturing enterprises, given their importance in Kosovo’s economy.

Significance: This research provides valuable insights for business managers to enhance investment strategies and improve financial performance. Policymakers can rely on this academic study to enhance the economic environment and promote the growth of businesses in Kosovo.

Details

VUCA and Other Analytics in Business Resilience, Part A
Type: Book
ISBN: 978-1-83753-902-4

Keywords

Article
Publication date: 8 December 2022

B.V. Binoy, M.A. Naseer and P.P. Anil Kumar

Land value varies at a micro level depending on the location’s economic, geographical and political determinants. The purpose of this study is to present a comprehensive…

Abstract

Purpose

Land value varies at a micro level depending on the location’s economic, geographical and political determinants. The purpose of this study is to present a comprehensive assessment of the determinants affecting land value in the Indian city of Thiruvananthapuram in the state of Kerala.

Design/methodology/approach

The global influence of the identified 20 explanatory variables on land value is measured using the traditional hedonic price modeling approach. The localized spatial variations of the influencing parameters are examined using the non-parametric regression method, geographically weighted regression. This study used advertised land value prices collected from Web sources and screened through field surveys.

Findings

Global regression results indicate that access to transportation facilities, commercial establishments, crime sources, wetland classification and disaster history has the strongest influence on land value in the study area. Local regression results demonstrate that the factors influencing land value are not stationary in the study area. Most variables have a different influence in Kazhakootam and the residential areas than in the central business district region.

Originality/value

This study confirms findings from previous studies and provides additional evidence in the spatial dynamics of land value creation. It is to be noted that advanced modeling approaches used in the research have not received much attention in Indian property valuation studies. The outcomes of this study have important implications for the property value fixation of urban Kerala. The regional variation of land value within an urban agglomeration shows the need for a localized method for land value calculation.

Details

International Journal of Housing Markets and Analysis, vol. 17 no. 3
Type: Research Article
ISSN: 1753-8270

Keywords

Abstract

Details

Understanding Financial Risk Management, Third Edition
Type: Book
ISBN: 978-1-83753-253-7

Article
Publication date: 2 May 2024

Sophie Wood, Annie Williams, Nell Warner, Helen Ruth Hodges, Aimee Cummings and Donald Forrester

Secure children’s homes (SCHs) restrict the liberty of young people considered to be a danger to themselves or others. However, not all young people referred to SCHs find a…

Abstract

Purpose

Secure children’s homes (SCHs) restrict the liberty of young people considered to be a danger to themselves or others. However, not all young people referred to SCHs find a placement, and little is known about the outcomes of the young person after an SCH or alternative placement. The purpose of this paper is to understand which characteristics most likely predict allocation to an SCH placement, and to explore the outcomes of the young people in the year after referral.

Design/methodology/approach

A retrospective electronic cohort study was conducted using linked social care data sets in England. The study population was all young people from England referred to SCHs for welfare reasons between 1st October 2016 to 31st March 2018 (n = 527). Logistic regression tested for differences in characteristics of SCH placement allocation and outcomes in the year after referral.

Findings

In total, 60% of young people referred to an SCH were allocated a place. Factors predicting successful or unsuccessful SCH allocation were previous placement in an SCH (OR = 2.12, p = 0.01); being female (OR = 2.26, p = 0.001); older age (OR = 0.75, p = 0.001); and a history of challenging behaviour (OR = 0.34, p = 0.01). In the year after referral, there were little differences in outcomes between young people placed in a SCH versus alternative accommodation.

Originality/value

The study raised concerns about the capacity of current services to recognise and meet the needs of this complex and vulnerable group of young people and highlights the necessity to explore and evaluate alternatives to SCHs.

Details

Journal of Children's Services, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-6660

Keywords

Article
Publication date: 4 December 2023

Crystal Glenda Rodrigues and B.V. Gopalakrishna

The investment behaviour of individuals has been a major area of interest for several researchers and policymakers due to its great impact on the economy. This study aimed to…

Abstract

Purpose

The investment behaviour of individuals has been a major area of interest for several researchers and policymakers due to its great impact on the economy. This study aimed to assess the investment behaviour of individuals in light of their risk appetite and how financial literacy regulates this relationship.

Design/methodology/approach

A self-administered structured questionnaire was used to collect responses from individuals using purposive and convenience sampling techniques. Individuals were presented with 16 investment avenues widely offered by the Indian financial market to choose from to construct a hypothetical portfolio. The association between risk appetite, financial literacy and the composition of the hypothetical portfolio was analysed using a gologit model.

Findings

Increased risk appetite increased the probability of respondents creating a portfolio with a greater proportion of risky assets and less diversification. Lower levels of financial literacy pointed towards portfolios with traditional and low-risk avenues. The results also revealed a significant moderating impact of financial literacy on risk appetite and the creation of the type of a hypothetical portfolio.

Research limitations/implications

Even though the intended behaviour is a close estimate of actual behaviour, there is a possibility of deviation that cannot be ignored.

Originality/value

The present study provides insights into how individuals make portfolio choices by incorporating risk appetite and diversification factors whilst making investment decisions, thereby expanding the literature from an emerging economy perspective. The role of financial literacy as a moderator has not been studied in the domain of hypothetical portfolio creation in India, which has been empirically explored in the current study.

Details

Managerial Finance, vol. 50 no. 5
Type: Research Article
ISSN: 0307-4358

Keywords

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