Investment In Real Estate Market Research Articles

The Determinants of Foreign Direct Investment in Real Estate Market of Turkey: Evidence from a Cointegrated VAR

The aim of the study is to analyze the macroeconomic determinants of foreign direct investment in real estate sector (FDIRE) covering the period from 2003:01-2016:12 for Turkey. To this aim, Johansen cointegration test and VECM (cointegrated VAR) have been employed and also impulse response functions and forecasted error variance decompositions have been analyzed to shed light on the issue of the nexus between selected macroeconomic indicators and FDIRE. Empirical findings suggest that the number of one-year lagged tourist arrivals and real house rent is the most important and statistically significant determinants of foreign direct investment in Turkish real estate sector. The findings imply that real house rent shocks also have a positive and significant impact on real house price.

Sub-optimal behavioural biases and decision theory in real estate

PurposeThe purpose of this study is to explain the relationship between behavioural biases, investment satisfaction and reinvestment intention considering the effect of evolutionary psychology. The study believes that biases are not at all times bad; sometimes, biases can assist the individual investor to select the top course of action and allow them to go for the less costly mistakes, thereby helping in achieving satisficing behaviour.Design/methodology/approachData were collected using structured and a close-ended questionnaire from a sample of 560 respondents by using multi-stage stratified sampling method. PLS-SEM was used for preliminary validation of the questionnaire. Mediation model using the structural equation model (SEM) with the help of AMOS 20 was used for the analyses. Pre-requisite assumptions for SEM were checked by using sample characteristics. The study has three constructs with multiple items; hence, the instrument validation was done by measuring the construct validity and reliability using Cronbach’s alpha, exploratory factor analysis and confirmatory factor analysis with the help of SPSS 20 and AMOS 20.FindingsThe study confirms that behavioural biases influence investment decisions in the real estate market. Further, investment satisfaction is found to have a significant and complementary partial mediating effect. The positive mediating effect of investment satisfaction between behavioural biases and reinvestment intention shows that biases are natural tendencies in response to limit to learning which can be explained by evolutionary psychology.Research limitations/implicationsThere are chances that the result obtained here is because of myopic decision-making behaviour in which the long-time horizon is not considered and behavioural biases, as well as evolutionary psychology, are adaptive, so the result may change in the long-time horizon, which seeks further investigations. The study talked about the relationship between behavioural biases, investment satisfaction and reinvestment intention; it will be interesting to bring some more constructs in this model, for example, investment intention and reinvestment behaviour; this can deliver a more precise picture in this regard.Practical implicationsUnderstanding such relationships will help in better clarity about the way investment is made. The study confirms that market behaviour in the real estate market is sub-optimal, which shows that there is an opportunity for attentive investors by trading and gathering on information. Real estate practitioners can get clues from market anomalies and investor phenomena; understanding these may suggest ways to use them in the market.Social implicationsReforms in the housing sector do not only satisfy one of the basic needs but also leads to holistic economic development. Besides direct contribution, it contributes to social capital.Originality/valueThe study extends the current knowledge base about the relationship between behavioural biases, investment satisfaction and reinvestment intention. This study investigates the behavioural biases influencing the real estate market investment decisions of non-professional investors considering the effect of evolutionary psychology.

An Analysis of the Factors Affecting Residence Hotel's Revenue per Available Room (RevPAR) -Focused on Residence Hotels in HCMC, Vietnam-

The increase of foreign tourists has encouraged the inflow of foreign capital in Vietnam. The investment in real estate market has grown relatively faster compared to other industries. Major investments in the real estate market are mostly residential properties and office buildings, but those markets have recently become saturated. As an alternative, the development of the recreational real estate has drawn public attention, but the business feasibility of the estate has not been tested yet. Thus, this study will examine the factors affecting the profitability of residence hotels in Vietnam by using Revenue per Available Room (RevPAR). The data used in this study was collected from 28 residence hotels located in Ho Chi Minh City, with their RevPAR. The time period ranges from 2007 to 2016 and dependent variable is the RevPAR, showing the operational results of the hotels. The independent variables affecting room income are residence traits, brand traits, and location and market traits. The results of the study are as follows. First, regarding the residence trait of hotels, RevPAR increases when the total number of hotel rooms is larger, and their operating period is longer. Second, as for brand trait, RevPAR goes up, when the hotel grades are higher and brand awareness is increased. The stylish designs of hotels enhance RevPAR as well. Third, with respect to location and market trait, when the hotels are located in a Central Business District(CBD), RevPAR is higher. In addition, the results also confirmed that the increase of tourists and consumer price index(CPI) is positively related to RevPAR.

Study on the Influence of Monetary Policy on Real Estate Price in China

The real estate industry has been in a stage of rapid development since 2000, and its pulling effect on economic growth is very significant, but it has continued to develop at a rapid pace over the years. The rising prices that follow have also had a lot of impact on all aspects of society and economy. However, a country’s macroeconomic control policy, especially monetary policy, has a very important impact on the development of the real estate industry. For example, the expansionary monetary policy since 2008 has increased the money supply, so that the real estate market investment and consumption rising, house prices accelerated. Although there are also a lot of restrictions of macroeconomic policy on the rise of house prices, the effect is not obvious. Therefore, it is necessary to make use of the policy means to regulate the real estate industry in order to achieve healthy development. This paper first analyzes the mechanism of monetary policy influencing real estate price, and then discusses the effect of monetary policy on real estate market by using empirical research method. It is found that both money supply and interest rate will have an impact on real estate price. Finally, combined with the conclusion of the analysis, some policy suggestions are put forward to improve the monetary policy system for the healthy development of the real estate industry.

Measuring behavioural biases affecting real estate investment decisions in India: using IRT

PurposeThis study aims to investigate the behavioural biases influencing the real estate market investing decisions of normal non-professional investors in India.Design/methodology/approachAs the study involves the behavioural data with polytomous response format, psychometric test- graded response model (IRT approach) was used for the study with the help of STATA 14. Multi-stage stratified sampling was used to collect a sample of 560 respondents. The study used a 14-item scale representing behavioural biases derived from two broad behavioural theories, i.e. heuristics and prospect theories. Sample characteristics were checked using SPSS 20. Pre-required assumptions for IRT (i.e. local independence and unidimensionality) were tested by CFA using AMOS 20.FindingsFive items, four of which belong to heuristics (anchoring – 2, representativeness – 1 and availability bias – 1) and one belong to prospect theory (regret aversion) are sufficient to measure the behavioural attitude of real estate investors in the Indian scenario. Item discrimination ai ranged from 0.95 to 1.52 (average value 1.29), showing moderate discrimination power of the items. The items have done a pretty good job of assessing the lower level of agreement. For the higher level of agreement, the scale came out to be less precise, with less information and higher standard error of measurement.Research limitations/implicationsAs the behavioural biases are often false, the study suggests the investors not to repeat these nasty biases to improve investment strategies. As they are shared and not easily changeable, understanding these biases may also help them in beating the market by acting as “noise traders”.Practical implicationsThe traditional price index is incomplete in some essential respects. The inclusion of these behavioural biases into the construction of price index will greatly improve the traditional price index, policymakers should seriously think about it.Social implicationsShelter is one of the basic needs; a dwelling unit is needed for one to stay in, develop and contribute to economy and society. If investors try to minimise these biases and policymakers keep a track of these while making strategies, mispricing in this sector can be controlled to some extent, which will ultimately help in the well-being of society.Originality/valueThis study contributes to the limited research by investigating the behavioural biases influencing the real estate market investment decisions of normal non-professional investors. It contributes to the lacking academe on real estate market in India. The study has used a psychometric test, i.e. the item response theory, for evaluating the quality of the items.

Centipede Game network model of investment in real estate market based on grey integration and forwards induction

Purpose – The purpose of this paper is to attempt the construct of a Centipede Game network model of investment in real estate market based on grey integration and forwards induction. Design/methodology/approach – The investment process of decision making in the real estate market is a multi-agent-stage dynamic process. The behavior of the game are interdependent and the ultimated equilibrium is an outcome of every the game adjust themselves comprehensively in certain conditions. The paper constructs a Centipede Game network model of investment in real estate market based on grey integration and forwards induction, regulars the method framework based on grey integration and forwards induction. Findings – The results verifies that the validity of Centipede Game network model by taking N's real estate market as an example. Practical implications – Most of the existing real estate market game researches study it from the view of pairwise game or one-to-many game, in fact, the game tend to be developed in the form of a network. And the paper puts forward Centipede Game network model based on the mode of players game in real estate market. Originality/value – The paper succeeds in providing a new and systematic framework of studying the real estate market game by using game theory.