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Article
Publication date: 9 February 2024

Nhung Thi Nguyen, An Tuan Nguyen and Dinh Trung Nguyen

This paper aims to examine the effects of investor sentiment on the development of the real estate corporate bond market in Vietnam.

Abstract

Purpose

This paper aims to examine the effects of investor sentiment on the development of the real estate corporate bond market in Vietnam.

Design/methodology/approach

The research uses an autoregressive distributed lag (ARDL) model with quarterly data. Additionally, the study employs Google Trends search data (GVSI) related to topics such as “Real Estate” and “Corporate Bond” to construct a sentiment index.

Findings

The empirical outcomes reveal that real estate market sentiment improves the growth of the real estate corporate bond market, while stock market sentiment reduces it. Also, there is evidence of a long-run negative effect of corporate bond market sentiment on the total value of real estate bond issuance. Further empirical research evidences the short-term effect of sentiment and economic factors on corporate bond development in the real estate industry.

Research limitations/implications

Due to difficulties in collecting data, this paper has the limited sample of 54 valid quarterly observations. Moreover, the sentiment index based on Google search volume data only reflects the interest level of investors, not their attitudes.

Practical implications

These results yield important implications for policymakers in respect of strengthening the corporate bond market platform and maintaining stability in macroeconomic and monetary policies in order to promote efficient and sustainable market development.

Social implications

The study offers some suggestions for regulators and governments to improve the real estate corporate bond market.

Originality/value

This is the first quantitative study to examine the effect of sentiment factors on real estate corporate bond development in Vietnam.

Details

Review of Behavioral Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1940-5979

Keywords

Article
Publication date: 8 January 2024

Deevarshan Naidoo, Peter Brian Denton Moores-Pitt and Joseph Olorunfemi Akande

Understanding which market to invest in for a well-diversified portfolio is fundamental in economies that are highly vulnerable to fluctuations in exchange rates. Extant…

Abstract

Purpose

Understanding which market to invest in for a well-diversified portfolio is fundamental in economies that are highly vulnerable to fluctuations in exchange rates. Extant literature that has considered phenomenon hardly juxtapose the markets. The purpose of this study is to examine the effects of exchange rate volatility on the Stock and Real Estate market of South Africa. The essence is to determine whether the fluctuations in the exchange rate influence the markets prices differently.

Design/methodology/approach

The Generalised Autoregressive Conditional Heteroskedasticity [GARCH (1.1)] model was used in establishing the effect of exchange rate volatility on both markets. This study used monthly South African data between 2000 and 2020.

Findings

The results of this study showed that increased exchange rate volatility increases stock market volatility but decreases real-estate market volatility, both of which revealed weak influences from the exchange rates volatility.

Practical implications

This study has implication for policy in using the exchange rate as a policy tool to attract foreign portfolio investment. The weak volatility transmission from the exchange rate market to the stock and real estate market indicates that there is prospect for foreign investors to diversify their investments in these two markets.

Originality/value

This study investigated which of the assets market, stock or housing market do better in volatile exchange rate conditions in South Africa.

Details

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

Keywords

Article
Publication date: 21 November 2023

Haobo Zou, Mansoora Ahmed, Syed Ali Raza and Rija Anwar

Monetary policy has major impacts on macroeconomic indicators of the country. Accordingly, uncertainty regarding monetary policy shifts can cause challenges and risks for…

Abstract

Purpose

Monetary policy has major impacts on macroeconomic indicators of the country. Accordingly, uncertainty regarding monetary policy shifts can cause challenges and risks for businesses, financial markets and investors. Thus, the purpose of this study is to investigate how real estate market volatility responds to monetary policy uncertainty.

Design/methodology/approach

The GARCH-MIDAS model is applied in this study to investigate the nexus between monetary policy uncertainty and real estate market volatility. This model was fundamentally instituted to accommodate low-frequency variables.

Findings

The results of this study reveal that increased monetary policy uncertainty highly affects the volatility in real estate market during the peak period of COVID-19 as compared to full sample period and COVID-19 recovery period; hence, a significant decline is evident in real estate market volatility during crisis.

Originality/value

This study is particularly focused on peak and recovery period of COVID-19 considering the geographical region of Greece, Japan and the USA. This study provides a complete perspective on the nexus between monetary policy uncertainty and real estate markets volatility in three distinct economic views.

Details

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

Keywords

Article
Publication date: 13 April 2023

Jobin Jacob, Arun Antony Chully, Benny J. Godwin and Jossy P. George

The purpose of this paper is to assess green marketing as an influential factor in the purchase of real estate. In this study, the consumer citizenship behaviour of young…

Abstract

Purpose

The purpose of this paper is to assess green marketing as an influential factor in the purchase of real estate. In this study, the consumer citizenship behaviour of young individuals will be studied with an assessment of real estate purchase intention, strategic green marketing orientation (GMO) and tactical GMO.

Design/methodology/approach

The sample frame consists of young consumers from India’s metropolitan cities. The respondents were in the range of 18 to 35 years of age. These cities provide a high standard of living, more career options and better educational opportunities. Five separate sections of a standardised questionnaire were used, and a structural equation model was used to assess a total of 393 valid replies.

Findings

Green marketing impacts the behaviour that influences the desire of young customer to buy green real estate.

Research limitations/implications

As the focus of this study is primarily on major cities, future research may study similar behaviour in non-metropolitan cities. The study can also be conducted among consumers of other age groups.

Originality/value

The originality, to the best of the author’s knowledge, exists in examining how young consumers’ opinions about green marketing impact their intentions to purchase green houses and real estate in India. This study will be accessible to all parties involved in the housing and real estate industries.

Details

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

Keywords

Article
Publication date: 17 May 2023

Ahmed Shoukry Rashad and Mahmoud Farghally

The monetary policy is an important driver of the real estate sector’s performance. The recent wave of monetary tightening in 2022 in response to the cost-of-living crisis has…

Abstract

Purpose

The monetary policy is an important driver of the real estate sector’s performance. The recent wave of monetary tightening in 2022 in response to the cost-of-living crisis has been associated with the decline in housing prices across the globe. There are two main channels through which the US monetary policy may affect the real estate market in the dollar-pegged countries: the cost of serving mortgages (financing cost) and the exchange rate channel (for example, the appreciation of the US dollar and consequently the local currency). The exchange rate channel, which involves the appreciation of the US dollar and the subsequent effect on the local currency, is particularly significant in the case of Dubai, given how international the housing market in Dubai and might be viewed as a tradable good. Using recent data, the purpose of this study to evaluate the spillover impact of the US monetary policy on the housing market performance in the dollar-pegged countries using Dubai as a case study.

Design/methodology/approach

For this purpose, this study collected unique longitudinal data on the volume of the monthly transactions of residential properties and performs a panel-data analysis using within-variation models. The changes in the interest rate policy in the USA are determined by the domestic inflation in the USA, thereby, representing an exogenous shock in the UAE.

Findings

The results are robust to different specifications and suggest that a strong negative correlation between the interest rate in the USA and the housing sector demand in Dubai. Fiscal policy measures can be taken to mitigate tighter financial conditions in case of policy misalignment.

Originality/value

Few studies have looked at the spillover impact of the global monetary conditions on the real estate market in the GCC region. This study fills this gap by exploring the impact of the US financial conditions on Dubai’s real estate, using panel data analysis.

Details

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

Keywords

Article
Publication date: 27 March 2023

Ons Zaouga and Nadia Loukil

The purpose of this paper is to test the existence of stylized facts, such as the volatility clustering, heavy tails seen on financial series, long-term dependence and…

Abstract

Purpose

The purpose of this paper is to test the existence of stylized facts, such as the volatility clustering, heavy tails seen on financial series, long-term dependence and multifractality on the returns of four real estate indexes using different types of indexes: conventional and Islamic by comparing pre and during COVID-19 pandemic.

Design/methodology/approach

Firstly, the authors examined the characteristics of the indexes. Secondly, the authors estimated the parameters of the stable distribution. Then, the long memory is detected via the estimation of the Hurst exponents. Afterwards, the authors determine the graphs of the multifractal detrended fluctuation analysis (MF-DFA). Finally, the authors apply the WTMM method.

Findings

The results suggest that the real estate indexes are far from being efficient and that the lowest level of multifractality was observed for Islamic indexes.

Research limitations/implications

The inefficiency behavior of real estate indexes gives us an idea about the prediction of the behavior of future returns in these markets on the basis of past informations. Similarly, market participants would do well to reassess their investment and risk management framework to mitigate new and somewhat higher levels of risk of their exposures during the turbulent period.

Originality/value

To the authors’ knowledge, this is the first real estate market study employing STL decomposition before applying the MF-DFA in the context of the COVID-19 crisis. Likewise, the study is the first investigation that focuses on these four indexes.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

Keywords

Article
Publication date: 29 March 2024

Sharmila Devi R., Swamy Perumandla and Som Sekhar Bhattacharyya

The purpose of this study is to understand the investment decision-making of real estate investors in housing, highlighting the interplay between rational and irrational factors…

Abstract

Purpose

The purpose of this study is to understand the investment decision-making of real estate investors in housing, highlighting the interplay between rational and irrational factors. In this study, investment satisfaction was a mediator, while reinvestment intention was the dependent variable.

Design/methodology/approach

A quantitative, cross-sectional and descriptive research design was used, gathering data from a sample of 550 residential real estate investors using a multi-stage stratified sampling technique. The partial least squares structural equation modelling disjoint two-stage approach was used for data analysis. This methodological approach allowed for an in-depth examination of the relationship between rational factors such as location, profitability, financial viability, environmental considerations and legal aspects alongside irrational factors including various biases like overconfidence, availability, anchoring, representative and information cascade.

Findings

This study strongly supports the adaptive market hypothesis, showing that residential real estate investor behaviour is dynamic, combining rational and irrational elements influenced by evolutionary psychology. This challenges traditional views of investment decision-making. It also establishes that behavioural biases, key to adapting to market changes, are crucial in shaping residential property market efficiency. Essentially, the study uncovers an evolving real estate investment landscape driven by evolutionary behavioural patterns.

Research limitations/implications

This research redefines rationality in behavioural finance by illustrating psychological biases as adaptive tools within the residential property market, urging a holistic integration of these insights into real estate investment theories.

Practical implications

The study reshapes property valuation models by blending economic and psychological perspectives, enhancing investor understanding and market efficiency. These interdisciplinary insights offer a blueprint for improved regulatory policies, investor education and targeted real estate marketing, fundamentally transforming the sector’s dynamics.

Originality/value

Unlike previous studies, the research uniquely integrates human cognitive behaviour theories from psychology and business studies, specifically in the context of residential property investment. This interdisciplinary approach offers a more nuanced understanding of investor behaviour.

Details

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

Keywords

Article
Publication date: 27 February 2024

Valery Yakubovsky and Kateryna Zhuk

This study aims to provide a comprehensive analysis of various approaches to the residential property market evolution modelling and to examine the macroeconomic fundamentals that…

Abstract

Purpose

This study aims to provide a comprehensive analysis of various approaches to the residential property market evolution modelling and to examine the macroeconomic fundamentals that have shaped this market development in Ukraine in recent years.

Design/methodology/approach

The study uses a comprehensive data set encompassing relevant macroeconomic indicators and historical apartment prices. Multifactor linear regression (MLR) and ridge regression (RR) models are constructed to identify the impact of multiple predictors on apartment prices. Additionally, the ARIMAX model integrates time series analysis and external factors to enhance modelling and forecasting accuracy.

Findings

The investigation reveals that MLR and RR yield accurate predictions by considering a range of influential variables. The hybrid ARIMAX model further enhances predictive performance by fusing external indicators with time series analysis. These findings underscore the effectiveness of a multidimensional approach in capturing the complexity of housing price dynamics.

Originality/value

This research contributes to the real estate modelling and forecasting literature by providing an analysis of multiple linear regression, RR and ARIMAX models within the specific context of property price prediction in the turbulent Ukrainian real estate market. This comprehensive analysis not only offers insights into the performance of these methodologies but also explores their adaptability and robustness in a market characterized by evolving dynamics, including the significant influence of external geopolitical factors.

Details

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

Keywords

Article
Publication date: 8 May 2023

Narvada Gopy-Ramdhany and Boopen Seetanah

Mauritius’s residential real estate sector has undergone an increase in foreign investment over the past decades. This study aims to establish if the increasing level of foreign…

Abstract

Purpose

Mauritius’s residential real estate sector has undergone an increase in foreign investment over the past decades. This study aims to establish if the increasing level of foreign real estate investments (FREI) has increased land demand and land prices. The study also aims to depict whether the relation between FREI and land prices prevails at an aggregate and/ or a regional level.

Design/methodology/approach

Data from 26 regions, classified as urban, rural and coastal is collected on an annual basis over the period 2000 to 2019, and a dynamic panel regression framework, namely, an autoregressive distributed lag model, is used to take into account the dynamic nature of land price modeling.

Findings

The findings show that, at the aggregate level, in the long-term, FREI does not have a significant influence on land prices, while in the short term, a positive significant relationship is noted between the two variables. A regional breakdown of the data into urban, rural and coastal was done. In the long term, only in coastal regions, a positive significant link was observed, whereas in urban and rural regions FREI did not influence land prices. In the short term, the positive link subsists in the coastal regions, and in rural regions also land prices are positively affected by FREI.

Originality/value

Unlike other studies which have used quite general measures of FREI, the present research has focused on FREI mainly undertaken in the residential real estate market and how these have affected residential land prices. This study also contributes to research on the determinants of land prices which is relatively scarce compared to research on housing prices.

Details

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

Keywords

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. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1753-8270

Keywords

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