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1 – 9 of 9Muhammad Tariq, Muhammad Azam Khan and Niaz Ali
This study aims to investigate the effect of monetary policy on housing prices for US economy. It specifically examines whether nominal or real interest rates are the key drivers…
Abstract
Purpose
This study aims to investigate the effect of monetary policy on housing prices for US economy. It specifically examines whether nominal or real interest rates are the key drivers behind fluctuations in housing prices in US.
Design/methodology/approach
Monthly data from January 1991 to July 2023 and various appropriate analytical tools such as unit root tests, Johansen’s cointegration test, vector error correction model (VECM), impulse response function and Granger causality test were applied for the data analysis.
Findings
The Johansen cointegration findings reveal the presence of a long-term relationship among the variables. VECM results indicate a negative correlation between nominal and real interest rates and housing prices in both the short and long terms, suggesting that a strict monetary policy can help in controlling the housing price increase in the USA. However, housing prices are more responsive to changes in nominal interest rates than to real interest rates. Additionally, the study reveals that the COVID-19 pandemic contributed to the upsurge in housing prices in the USA.
Originality/value
This study contributes by examining the role that nominal or real interest rates play in shaping housing prices in the USA. Moreover, given the recent significant upsurge in housing prices, this study presents a unique opportunity to investigate whether these price increases are influenced by the Federal Reserve's monetary policy decisions regarding nominal or real interest rates. Additionally, using monthly data, this study provides a deeper understanding of the fluctuations in housing prices and their connection to monetary policy tools.
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Chin Tiong Cheng and Gabriel Hoh Teck Ling
Increasing overhang of serviced apartments poses a serious concern to the national property market. This study aims to examine the impacts of macroeconomic determinants, namely…
Abstract
Purpose
Increasing overhang of serviced apartments poses a serious concern to the national property market. This study aims to examine the impacts of macroeconomic determinants, namely, gross domestic product (GDP), consumer confidence index (CF), existing stocks (ES), incoming supply (IS) and completed project (CP) on serviced apartment price changes.
Design/methodology/approach
To achieve more accurate, quality price changes, a serviced apartment price index (SAPI) was constructed through a self-developed hedonic price index model. This study has collected 1,567 transaction data in Kuala Lumpur, covering 2009Q1–2018Q4 for price index construction and data were analysed using the vector autoregressive model, the vector error correction model and the fully modified ordinary least squares (OLS) (FMOLS).
Findings
Results of the regression model show that only GDP, ES and IS were significantly associated with SAPI, with an R2 of 0.7, where both ES and IS have inverse relationships with SAPI. More precisely, it is predicted that the price of serviced apartments will be reduced by 0.56% and 0.21% for every 1% increase in ES and IS, respectively.
Practical implications
Therefore, government monitoring of serviced apartments’ future supply is crucial by enforcing land use-planning regulations via stricter development approval of serviced apartments to safeguard and achieve more stable property prices.
Originality/value
By adopting an innovative approach to estimating the response of price change to supply and demand in a situation where there is no price indicator for serviced apartments, the study addresses the knowledge gap, especially in terms of understanding what are the key determinants of, and to what extent they influence, the SAPI.
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This research investigates the Islamic banks’ intermediation role (e.g. branches and deposits) in financing. It also examines how financing contributes to the regions' economic…
Abstract
Purpose
This research investigates the Islamic banks’ intermediation role (e.g. branches and deposits) in financing. It also examines how financing contributes to the regions' economic growth and poverty alleviation as a predictor and mediator variable.
Design/methodology/approach
A total of 297 observations were extracted from 33 Indonesian districts and 14 Islamic banks during the period 2012–2020. Fixed-effect regression analysis was used to examine variable’s interactions.
Findings
The empirical results indicate that Islamic banks have adopted a channelling role towards redistributing capital from lender to borrower. Besides, there are crucial roles in developing economies and reducing poverty at the district level. This study also reinforces the critical role of financing in mediating the relationship between branches and deposits as predictor variables and GDP and poverty as outcome variables.
Research limitations/implications
The current study was limited to Indonesian Islamic banks and the district’s perspective. Future research needs to cover sub-districts and other poverty measurements (e.g. human education and development perspectives), including conventional and Islamic banks. It can help practitioners, regulators and researchers observe the dynamic behaviour of the banking sector to understand its role in the economic and social fields.
Practical implications
Bank managers and regulators should promote branches, deposits and financing. It also enlightens people about the essential role of Islamic banks and their fundamental operations in business and economics.
Originality/value
This study contributes to economic literature, bank managers and local governments' decision-making processes by developing and testing an economic growth and poverty model.
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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.
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Nikhil Kumar Kanodia, Dipti Ranjan Mohapatra and Pratap Ranjan Jena
Economic literature highlights both positive and negative impact of FDI on economic growth. The purpose of this study is to confirm the relationship between various economic…
Abstract
Purpose
Economic literature highlights both positive and negative impact of FDI on economic growth. The purpose of this study is to confirm the relationship between various economic factors and FDI equity inflows and find out deviations, if any. This is investigated using standard time-series econometric models. The long and short run relationship is inquired with respect to market size, inflation rate, level of infrastructure, domestic investment and openness to trade. The choice of variables for Indian economy is purely based on empirical observations obtained from scientific literature review.
Design/methodology/approach
The study involves application of autoregressive distributive lag (ARDL) model to investigate the relationship. The long run co-integration between FDI and economic growth is tested by Pesaran ARDL model. The stationarity of data is tested by augmented Dickey Fuller test and Phillip–Perron unit root test. Error correction model is applied to study the short run relationship using Johansen’s vector error correction model method besides other tests.
Findings
The results show that the domestic investment, inflation rate, level of infrastructure and trade openness influence inward FDI flows. These factors have both long and short-term relationship with FDI inflows. However, market size is insignificant in influencing the foreign investments inflows. There lies an inverse relation between FDI and inflation rate.
Originality/value
To the best of the authors’ knowledge, the study is original. The methodology and interpretation of results are distinct and different from other similar studies.
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This study aims to examine the impact of some real variables such as real effective exchange rates, real mortgage rates, real money supply, real construction cost index and…
Abstract
Purpose
This study aims to examine the impact of some real variables such as real effective exchange rates, real mortgage rates, real money supply, real construction cost index and housing sales on the real housing prices.
Design/methodology/approach
This study uses a nonlinear autoregressive distributed lag (NARDL) model in the monthly period of 2010:1–2021:10.
Findings
The real effective exchange rate has a positive and symmetric effect. The decreasing effect of negative changes in real money supply on real housing prices is higher than the increasing effect of positive changes. Only positive changes in the real construction cost index have an increasing and statistically significant effect on real house prices, while only negative changes in housing sales have a small negative sign and a small increasing effect on housing prices. The fact that the positive and negative changes in real mortgage rates are negative and positive, respectively, indicates that both have a reducing effect on real housing prices.
Originality/value
This study suggests the first NARDL model that investigates the asymmetric effects on real housing prices instead of nominal housing prices for Turkey. In addition, the study is the first, to the best of the authors’ knowledge, to examine the effects of the five real variables on real housing prices.
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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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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.
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In this study, the impact of access to electricity on poverty reduction for Botswana is examined using the annual data from 1990 to 2021. The study was motivated by the need to…
Abstract
Purpose
In this study, the impact of access to electricity on poverty reduction for Botswana is examined using the annual data from 1990 to 2021. The study was motivated by the need to establish if access to electricity could be a panacea on poverty reduction in Botswana. Given that the United Nations Sustainable Development Goals deadline is fast approaching, and Botswana being one of the signatories, is expected to end poverty in all its forms – Goal 1. Establishing the role that electrification plays in poverty alleviation, helps in refocusing Botswana’s poverty alleviation strategies on factors that have high impact on poverty. The main objective of this study, therefore, is to investigate the relationship between poverty alleviation and access to electricity in Botswana.
Design/methodology/approach
The study uses the autoregressive distributed lag (ARDL) approach to investigate the nature of the relations. Two poverty proxies were used in this study namely, household consumption expenditure and life expectancy.
Findings
The study found access to electricity to reduce poverty in the long run and in the short run, regardless of the poverty measure used. Thus, access to electricity plays an important role in poverty alleviation and Botswana is recommended to continue with the rural and urban electrification initiatives.
Originality/value
The study explores the impact of access to electricity on poverty reduction in Botswana, a departure from the current studies that examined the same relationship using energy consumption in general. This is on the back of increasing dependence of economic activities on electricity as a major source of energy.
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