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Article
Publication date: 9 April 2021

Daniel Lo, Michael James McCord, John McCord, Peadar Thomas Davis and Martin Haran

The price-to-rent ratio is often regarded as an important indicator for measuring housing market imbalance and inefficiency. A central question is the extent to which house prices…

Abstract

Purpose

The price-to-rent ratio is often regarded as an important indicator for measuring housing market imbalance and inefficiency. A central question is the extent to which house prices and rents form part of the same market and thus whether they respond similarly to parallel stimulus. If they are close proxies dynamically, then this provides valuable market intelligence, particularly where causal relationships are evident. Therefore, this paper aims to examine the relationship between market and rental pricing to uncover the price switching dynamics of residential real estate property types and whether the deviation between market rents and prices are integrated over both the long- and short-term.

Design/methodology/approach

This paper uses cointegration, Wald exogeneity tests and Granger causality models to determine the existence, if any, of cointegration and lead-lag relationships between prices and rents within the Belfast property market, as well as the price-to-rent ratios amongst its five main property sub-markets over the time period M4, 2014 to M12 2018.

Findings

The findings provide some novel insights in relation to the pricing dynamics within Belfast. Housing and rental prices are cointegrated suggesting that they tend to move in tandem in the long run. It is further evident that in the short-run, the price series Granger-causes that of rents inferring that sales price information unidirectionally diffuse to the rental market. Further, the findings on price-to-rent ratios reveal that the detached sector appears to Granger-cause those of other property types except apartments in both the short- and long-term, suggesting possible spill-over of pricing signals from the top-end to the lower strata of the market.

Originality/value

The importance of understanding the relationship between house prices and rental market performance has gathered momentum. Although the house price-rent ratio is widely used as an indicator of over and undervaluation in the housing market, surprisingly little is known about the theoretical relationship between the price-rent ratio across property types and their respective inter-relationships.

Details

International Journal of Housing Markets and Analysis, vol. 14 no. 5
Type: Research Article
ISSN: 1753-8270

Keywords

Article
Publication date: 15 March 2019

Abdulkader Mostafa and Colin Anthony Jones

The UK experienced a substantial rise in owner occupation over the twentieth century, and many tenants still aspire to homeownership. These strong aspirations to own are…

Abstract

Purpose

The UK experienced a substantial rise in owner occupation over the twentieth century, and many tenants still aspire to homeownership. These strong aspirations to own are attributed to a set of financial and non-financial benefits. This paper aims to calculate, for the first time, the financial returns from buying versus renting in Britain for first-time buyers in 11 regions.

Design/methodology/approach

It applies a DCF approach based on historical housing and mortgage market data from 1975 to 2012.

Findings

The paper finds strong evidence that, in purely financial terms, buying has been always superior to renting in all regions of the UK over the period.

Practical implications

It gives a clear message of the financial benefits of homeownership over renting in Britain, even over very short time periods.

Originality/value

The paper is the first to apply a comprehensive DCF model to the choice between renting and owning.

Details

Journal of European Real Estate Research, vol. 12 no. 1
Type: Research Article
ISSN: 1753-9269

Keywords

Book part
Publication date: 15 July 2009

Ross B. Emmett and Kenneth C. Wenzer

Dublin, Wednesday, 1 a.m., Aug. 9, 1882.

Abstract

Dublin, Wednesday, 1 a.m., Aug. 9, 1882.

Details

Henry George, the Transatlantic Irish, and their Times
Type: Book
ISBN: 978-1-84855-658-4

Article
Publication date: 11 April 2020

Amira Mukendi and Claudia Elisabeth Henninger

Currently, fashion rental is suggested as being a way to bring about sustainability in the fashion industry. Although there has been some success for brands in this space, as of…

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Abstract

Purpose

Currently, fashion rental is suggested as being a way to bring about sustainability in the fashion industry. Although there has been some success for brands in this space, as of yet fashion rental remains a niche form of consumption. This study aims to uncover consumer perspectives of fashion rental to identify opportunities for developing a fashion rental business that meets the needs of current consumers.

Design/methodology/approach

This is a qualitative study utilising semi-structured interviews combined with brainstorming and drawing exercises. Interviews were conducted with 17 women and three men.

Findings

Findings indicate that considerations around fashion rentals are utilitarian in nature focussing on functional benefits rather than more hedonistic ones. A spectrum of products that people would be most interested in renting is given.

Research limitations/implications

Although the study invited male and female participants, the sample is more female-heavy, which may reflect the fact that women tend to be more open to alternative modes of consumption.

Practical implications

An important implication is that asking consumers to rent clothing requires a significant change in mindset. Brands need to ensure that their services “make sense” for the consumer to consider it as a viable alternative to purchasing new clothing.

Originality/value

This paper proposes a spectrum of fashion items that consumers may be interested in renting; this aims to help brands develop services that meet consumer needs.

Details

Journal of Fashion Marketing and Management: An International Journal, vol. 24 no. 3
Type: Research Article
ISSN: 1361-2026

Keywords

Article
Publication date: 31 January 2022

İsmail Cem Özgüler, Z. Göknur Büyükkara and C. Coskun Küçüközmen

The purpose of this study is to determine the Turkish housing price and rent dynamics among seven big cities with a unique monthly data set over 2003–2019. The secondary purpose…

382

Abstract

Purpose

The purpose of this study is to determine the Turkish housing price and rent dynamics among seven big cities with a unique monthly data set over 2003–2019. The secondary purpose is to examine bubble dynamics within the price convergence framework through alternative tests.

Design/methodology/approach

The paper conducts two autoregressive distributed lag (ARDL) cointegration estimates for housing prices and rents and applies conditional error correction model to investigate the long-run drivers of the Turkish housing market. The authors compare ARDL cointegration in-sample forecasts and discounted cash flow (DCF) estimates with actual prices to determine the timing, magnitude and collapse period(s) of bubbles within the price convergence framework. In particular, the generalized sup augmented Dickey–Fuller (GSADF) approach time stamps multiple explosive price behaviors.

Findings

The ARDL results confirm the theory of investment value by addressing mortgage rates, the price-to-rent ratio and rents as the fundamental factors of house prices. The price-to-rent ratio offers a comparison mechanism among houses deciding to buy a new house in which rents increase monthly real estate investment returns, and mortgage rates act as the discount rate. One key finding is that these dynamics have a greater impact on house prices than mortgage rates. Furthermore, the ARDL, DCF and GSADF findings exhibit temporal overvaluations rather than bubble signals, implying that housing price appreciations, including explosive behaviors, are consistent with fundamental advances.

Originality/value

This paper is considered to be innovative in determining housing market dynamics through two different ARDL estimates for the Turkish housing price index and rents in real terms as dependent variables. The authors compare the boom and collapse periods of the real housing price index and its fundamentals via the GSADF test. A final key feature of this research is its extensive data set, with 11 different regressors between 2003 and 2019.

Details

International Journal of Housing Markets and Analysis, vol. 16 no. 1
Type: Research Article
ISSN: 1753-8270

Keywords

Article
Publication date: 8 June 2022

Zhenfeng Liu, Yujie Wang and Jian Feng

This paper aims to study vehicle-type strategies for the manufacturer's car sharing by accounting for consumers' behavior and the subsidy.

Abstract

Purpose

This paper aims to study vehicle-type strategies for the manufacturer's car sharing by accounting for consumers' behavior and the subsidy.

Design/methodology/approach

The authors develop a game model, in which a monopoly manufacturer that can produce gasoline vehicles (GVs) or energy vehicles (EVs) not only sells vehicles in the sales market, but also rents them out in the sharing market by the self-built platform. The manufacturer strategically chooses which type of vehicles based on consumers' behavior and whether the government provides the EVs’ subsidy.

Findings

When consumers' low-carbon awareness is relatively high or the marginal cost is low, the manufacturer chooses EVs. The manufacturer chooses GVs when the low-carbon awareness and the marginal cost are low. Only when the low-carbon awareness and the subsidy are not too low, the manufacturer who originally chose GVs launches EVs. When the low-carbon awareness is high, the excessive subsidy discourages the manufacturer from entering the sharing market. If the government provides the subsidy, the manufacturer launches high-end EVs. Otherwise, the manufacturer launches low-end EVs. Moreover, the subsidy increases consumer surplus and social welfare since the high subsidy makes EVs’ sharing market demand be negative.

Originality/value

This study enriches the literature on vehicle-type strategies for the manufacturer's car sharing, owns a practical significance to guide the manufacturer's operation management in the car sharing market and provides advice on whether the government should provide EVs’ subsidy.

Details

Kybernetes, vol. 52 no. 10
Type: Research Article
ISSN: 0368-492X

Keywords

Article
Publication date: 1 February 1983

Keith Fletcher and Alan Napier

Examines the threats posed to the UK rental industry by consumers' decision to buy. Traces the history of the UK rental industry, including the decline of black and white against…

Abstract

Examines the threats posed to the UK rental industry by consumers' decision to buy. Traces the history of the UK rental industry, including the decline of black and white against the boom of colour, and the rise of brand consciousness. Addresses marketing issues including pricing and the location of showrooms. Discusses the consequences of competition in the marketplace. Highlights the results of a survey into consumers' attitudes on buying or renting. Asserts that consumer motivations to continue or renew a rental agreement are not the same as at the initial decision to rent, so rental companies must adopt new marketing tactics. Concludes that rental companies must reverse the trend for replacement decisions to favour purchase over renting or their future looks bleak.

Details

European Journal of Marketing, vol. 17 no. 2
Type: Research Article
ISSN: 0309-0566

Keywords

Article
Publication date: 2 May 2017

Darius Kulikauskas

This paper aims to use the user costs approach to identify the periods of over- and under-valuation in the Baltic residential real estate markets.

Abstract

Purpose

This paper aims to use the user costs approach to identify the periods of over- and under-valuation in the Baltic residential real estate markets.

Design/methodology/approach

Three alternative estimates of the user costs of homeownership in the Baltics are computed: one that does not discriminate between the leveraged and unleveraged parts of a house and the other that takes loan-to-value ratios into account.

Findings

The approach successfully identifies the overheating that took place in the Baltic real estate markets prior to the crisis of 2009 and shows that there is significant upward pressure for the housing prices in the Baltics in the low interest rate environment that became prevalent ever since.

Research limitations/implications

The paper uses only the current values of the fundamentals to compute the user costs. The framework could be augmented to account for the expected future developments of the fundamentals.

Practical implications

The macroprudential policy makers should monitor the developments in the Baltic residential real estate markets closely and be ready to act because an increase in the price-to-rent ratios might seem sustainable, given the current low interest rates, but could potentially bring harmful volatility when the monetary policy normalises.

Originality/value

This paper builds a novel data set on the real estate markets of the Baltic countries and is the first to derive the user costs of homeownership in the region. It is also among the first to identify periods of housing price misalignments from their fundamental values in the Baltic States.

Details

Journal of European Real Estate Research, vol. 10 no. 1
Type: Research Article
ISSN: 1753-9269

Keywords

Article
Publication date: 1 September 2021

Djoni Hartono, Tony Irawan, Khoirunurrofik Khoirunurrofik, Ramadani Partama, Nurul Wajah Mujahid and Desi Setiadestriati

High numbers of housing backlogs as well as inadequate housing for low-income are one of the Indonesian government’s major concerns, especially in urban areas where the price of…

Abstract

Purpose

High numbers of housing backlogs as well as inadequate housing for low-income are one of the Indonesian government’s major concerns, especially in urban areas where the price of house is high. This study aims to identify low-income communities’ preferences on house ownership status, renting or buying and house provider, public or private, in Jakarta and surrounding areas.

Design/methodology/approach

This study adapts Longley multistage choice model in the Indonesian context to analyze people’s preferences in choosing a place to live in urban areas. This study analyzes two choices of models which are aspects of homeownership (buying or renting) and aspects of residential types (private or public).

Findings

Using data collected through a survey of 1,000 households in greater Jakarta (Jakarta, Bogor, Depok, Tangerang, and Bekasi), this study found that households which have fixed employment status, an older age, a larger number of family members, higher level of education and literacy in housing policy, accessible house location and more affordable to own house have a higher probability to choose to own a house. In addition, education level, age, and family size are major determinants of a household’s decision to occupy a public house rather than a private house. The findings provide basic input to government development programs in designing housing policy for low-income people.

Originality/value

There are only a few studies related to house-ownership preferences in low-income people, especially in developing countries, including Indonesia. This study contributes to the housing studies literature by strengthening empirical evidence from developing countries that have large populations and mostly live in urban areas.

Details

International Journal of Housing Markets and Analysis, vol. 15 no. 5
Type: Research Article
ISSN: 1753-8270

Keywords

Article
Publication date: 30 April 2019

Marcelo Cajias

This paper aims to develop a conceptual understanding and a methodological approach for calculating residential net initial yields for both a buy-to-hold and rental investment…

Abstract

Purpose

This paper aims to develop a conceptual understanding and a methodological approach for calculating residential net initial yields for both a buy-to-hold and rental investment strategy from hedonic models.

Design/methodology/approach

The markets modelled comprehend of dwellings for rent and sell in Germany. For each of them, two regression models are estimated to extract implicit prices and rents for an artificial identical dwelling and estimate the willingness to pay for the same asset from both a buy-to-hold and rental investment strategy.

Findings

The 3,381 estimated net initial yields in the 161 German markets showed a spatial pattern with the biggest and most attractive cities showing the lowest yields and a self-adjusting process in the markets surrounding the top cities. The net initial yields over time show that prices have increased stronger than rents, leading to rock bottom yields for residential assets and a significant premium in comparison to government bond yields. The approach responds to the spatial hierarchy of markets in Germany, meaning that the level of the estimated yields is accurate and achievable from an investment perspective.

Practical implications

The investment case in residential markets is certainly unique as net initial yields are scarce, especially due to the relatively low number of investment comparables. The paper sheds light on this problem from a conceptual and methodological perspective and confirms that investment yields are deducible by making usage of hedonic models and big data.

Originality/value

In the era of digitalization and big data, residential assets are mostly brought to the market via digital multiple listing systems. Transparency is an essential barrier when assessing the pricing conditions of markets and deriving investment decisions. Although international brokers do provide detailed investment comparables on – mostly commercial – real estate markets, the residential sector remains a puzzle when it comes to investment yields. The paper sheds light on this problem.

Details

International Journal of Housing Markets and Analysis, vol. 12 no. 4
Type: Research Article
ISSN: 1753-8270

Keywords

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