Real Estate Investment Research Articles

Do high house prices promote the development of China's real economy? Empirical evidence based on the decomposition of real estate price.

Moderate rising of house prices are beneficial to the economic development. However, over high house prices worsen the economic distortions and thus hinder the development of the real economy. We use the stochastic frontier models to calculate the fundamental value in the housing in Chinese large and medium cities, and then obtain indexes which could measure the house prices' deviations from the fundamental value. With the macroeconomic data in the city-level, this paper empirically investigates the effects of the house prices' deviations on macro-economic variables like consumption, investment and output. The study reveals that the housing bubble exists in most Chinese cities, and first-tier cities fare the worst. House prices over the fundamental value, which could increase the scale of real estate investment, bring adverse impacts on GDP, as it causes declining civilian consumption and discourages real economy's investment and production. The encouragement and the discouragement on macroeconomy caused by house prices' deviation from its basic value take turns to play a key role in the process of China' eco-nomic growth. In the early stage of China's economic growth, the encouragement effect predominates. As urbanization and industrialization gradually upgrade to a higher level, the discouragement effect takes charge.

Analysis of the Impact of Monetary Policy on the Housing Market

Monetary policy, a pivotal tool in macroeconomic management, wields significant influence over the intricate interplay of supply and demand within the housing market. This study aims to dissect the repercussions of monetary policy on this crucial dynamic. By synthesizing insights and case studies from diverse global contexts, and employing a spectrum of analytical models, this article endeavor to elucidate the outcomes stemming from both expansive and restrictive monetary approaches. Notably, the ebb and flow of interest rates instigate distinctive effects on housing supply and demand. This research scrutinizes the intricate relationship between monetary policy and the real estate market. Under loose monetary conditions, a surge in home purchases is anticipated, paralleled by an expansion in real estate investments by astute investors. Conversely, as monetary policy tightens, the propensity to buy homes wanes, with a corresponding contraction in investment activity. This shift inevitably reverberates through the real estate sector, precipitating a discernible downturn.

A Real Option Analysis of the “Flats for Land” System - an Idiosyncratic Equity Financing Mechanism on Real Estate Investments

A typical real estate development project encounters an entrée capital expense for land purchase that is not immediately recovered until the allocated capital for the land acquisition is replaced with new capital that converts the land to a rentable building space. This article presents an idiosyncratic equity financing scheme that eliminates the sunk cost for a land purchase over a real estate development, within a real options framework. The study provides a model solution, numerical results of the option value, and the optimal investment threshold of a real estate development that is initiated through the “flats for land” scheme.

Modelling the effect of macroeconomic factors on residential real estate investment returns in Abuja and Lagos, Nigeria

PurposeThis study evaluated the effect of macroeconomic factors on residential real estate (RE) investment returns in the cities of Abuja and Lagos, Nigeria, with a view to guiding RE investors and researchers.Design/methodology/approachA survey research design was employed using a questionnaire to collect RE transaction data from 2008 to 2022 from estate surveying and valuation firms in the study areas. Rental and capital value data collected were used to construct rental and capital value indices and total returns on investment. The macroeconomic data used were retrieved from the archives of the Central Bank of Nigeria (CBN). Granger causality (GC) and multiple regression models were adopted to evaluate the effect of selected macroeconomic variables on residential RE investment returns in the study areas.FindingsThe study found a progressive upward movement in rental and capital values of residential RE investment in the study areas within the study period. Total and risk-adjusted returns on investment were equally positive within the study period. Only the inflation rate, unemployment rate and real gross domestic product (GDP) per capita were found to be the major determinants of residential RE investment returns in the study areas within the study period.Research limitations/implicationsThe secrecy associated with property transaction information/data by RE practitioners in the study areas posed a challenge. Property transaction data were not adequately kept in a way for easier access and retrieval in many of the estate firms and agent offices. Consequently, there was a lack of data that spanned the study period in some of the sampled estate firms or agent offices. This data collection challenge was, however, overcome by the excess time spent retrieving the required data for this study to ensure that the findings appropriately answer the research questions. Practical implicationsInflation and GDP per capita have been found to be significant factors that influence residential RE investment performance in the study areas. Therefore, investors should pay attention to these identified macroeconomic factors for residential RE investment in the study areas whilst making investment decisions in order to mitigate a possible loss of income or return. The government should formulate and implement economic policies that would address the current high unemployment and inflation rates in Nigeria at large.Originality/valueThis study has extended and further enriched the existing body of knowledge in the field of RE investment analysis in Nigeria. To the best of the authors' knowledge, this study is the first to adopt the Cornish Fisher value-at-risk and modified Sharpe ratio models to analyse risk and risk-adjusted returns on residential RE investment, respectively, in Nigeria. It has therefore redirected the focus of RE researchers and practitioners to a more objective approach to RE investment performance analysis in Nigeria.

Valuation of Real Estate Investment Trusts using the PSI-CoCoSo Multicriteria Method

In recent years, we can observe the growth in the number of investors in the financial market. This work seeks to improve the decision-making process in real estate investment funds (Brazilian REITs). To this end, a literature review was carried out in the Scopus database using bibliometrix to analyze the applications of the multicriteria decision aid (MCDA) in the environment of Brazilian REITs, as a result, it was possible to analyze a greater approach to studies on the toma in Australia, the United Kingdom, the United States, and China. The study was promising because it opens new possibilities of approach and opportunities to cover applications, seeking to explore and use MCDA methods to provide support at all stages of the decision-making process. The literature review was used as a basis for structuring the problem and defining the application of the hybrid PSI-CoCoSo method for ordering Brazilian REITs in the corporate slabs sector traded on the São Paulo stock exchange (B3), the criterion was to address funds that have at least one million reais in daily trading on the stock exchange. As a result, the hybrid method proved to be effective in the ranking process, providing robust results on the application and evaluation of Brazilian REITs.

Leveraging consumer behavior and macroeconomic factors to increase real estate investment potential

The Indonesian real estate market has shown promising development in recent years, attracting investors seeking lucrative opportunities. This research aims to increase the success rate of real estate investments in Indonesia by examining the connection between macroeconomic factors and consumer behavior. This study employs vector autoregression (VAR) models to investigate the influence of macroeconomic data on the Indonesian house price index (HPI). We intend to determine the primary determinants of the HPI by analyzing various macroeconomic indicators, including GDP growth, CPI, crude oil, interest rates, and the unemployment rate. In addition, the research investigates the role of consumer behavior in Indonesian real estate searches. Real estate developers and investors can gain valuable insight into the effect of consumer preferences, motivations, and decision-making processes on demand functions by understanding consumer preferences, incentives, and decision-making processes. A comprehensive analysis of historical data and econometric modeling techniques are employed to accomplish research objectives. The research is conducted using pertinent macroeconomic indicators, real estate market data, and consumer surveys.

ІНВЕСТИЦІЇ ЯК КЛЮЧОВА ПЕРЕДУМОВА РОЗВИТКУ РИНКУ НЕРУХОМОСТІ

The article presents the results of a study on a comprehensive approach to real estate investment, focusing on the issues and challenges that affect investment activity. Various problems related to the functioning of the real estate market in Ukraine are analyzed. In particular, the article analyzes the structure of distribution of investors' interests in various types of assets in the Ukrainian real estate market, the structure of investment capital in the construction industry and the scale of investment capital by type of activity for 2018–2022. When choosing a way to invest in real estate, it should be noted that it is important to understand the risks associated with this type of investment and conduct research before making an investment decision. It is worth noting that the state program “eHouse” played an important role in the development of modern mortgage financing. It is substantiated that in order to attract international investors, the Government continues to improve the investment climate by protecting investors' rights and simplifying the procedures for entering the real estate market. International financial institutions and donors provide support to Ukraine in the form of loans for infrastructure projects that have a direct impact on the real estate market, in particular, for the reconstruction of residential and commercial real estate. The authors note that real estate investment in Ukraine has great potential despite the challenges of war and economic instability. The advantages and disadvantages of investing in real estate in Ukraine are clearly illustrated, as it is one of the ways to capitalize with moderate risks and subsequent profits. The main trends in the real estate market in 2024 that will affect investors are analyzed. Commercial real estate, in particular office and logistics space, remains attractive to investors, as do residential projects. In addition, the trend towards sustainability and environmental improvements is also opening up new development opportunities. Since investment is a prerequisite for the development of the real estate market, the catalysts that influence investment in the real estate market have been systematized. Real estate segments are identified, investment prospects and expected returns in each of them are analyzed.

Impact of Foreign Investors on the Turkish Construction Industry

This study investigates the calendar and calendar-seasonal effects on foreign investors’ housing acquisitions in the Turkish real estate market and its influence on the Turkish construction indexes. Understanding the pattern of housing acquisition by foreign investors in Turkish real estate could be essential information for policymakers. The Turkish statistical database reflects 23 prominent countries’ foreign housing acquisitors in Turkey, and all data were analysed. This study employed quantitative analysis of unbalanced panel data obtained from Turk-Statistics, which ranges from January 2015 to May 2023. The pooled Mean Group/ ARDL Lag model was used for the analysis. The finding established a long-run positive association between foreigners’ housing acquisitions in Turkey and Turkish construction indices. The short-run trend is positively significant for all foreign investors across the model. In addition, the finding revealed that a series of lag construction indices and housing acquisitions predicted short-run deviations. The finding closes the research gap and contributes crucial information to the policymakers in taking necessary policy action when required. The study also provides essential information to foreign investors on their investment decisions, especially on the relationship between foreign housing acquisitions and the influence of the Turkish adjusted construction indexes.

Research on Real Estate Investment Project Valuation Based on the Binomial Tree Model

Research on Real Estate Investment Project Valuation Based on the Binomial Tree Model

Triskaidekaphobia: The Role of the Dreaded 13th Floor in Shaping Investment Preferences in the Indian Residential Real Estate Market

This study investigates the influence of triskaidekaphobia, the fear of the number 13, on investment preferences in the Indian residential real estate market, specifically examining attitudes towards properties on the 13th floor in high-rise buildings. Originating in Western cultures, triskaidekaphobia has transcended cultural boundaries, influencing the Indian market, which is traditionally shaped by a blend of cultural, religious, and socio-economic factors, including beliefs like Vastu Shastra. Using a quantitative research methodology, the study surveyed 500 participants from various demographic backgrounds across India. The findings reveal a significant awareness of triskaidekaphobia among the respondents, with a majority strongly believing in this superstition. This belief translates into a considerable reluctance to invest in properties on the 13th floor, with many respondents and potential developers expressing a preference to exclude or rename this floor. Statistical analyses, including correlation and regression, indicate a negative relationship between belief in triskaidekaphobia and willingness to invest in the 13th floor. These findings suggest that triskaidekaphobia significantly influences real estate investment decisions in India, reflecting the deep-rooted impact of cultural beliefs on economic behaviors. The study contributes to the understanding of cultural influences in the real estate market and offers insights for real estate developers, urban planners, and policymakers. It highlights the importance of cultural sensitivity in business strategies and the need to consider local beliefs and superstitions in market analyses. The research suggests that addressing the irrational basis of triskaidekaphobia through investor education could open new market opportunities and promote more rational investment choices.

Impact of RERA, 2016 on The Growth of Real Estate in India

Investing in real estate in India is complex, involving substantial savings, extensive research, and numerous legalities. The Real Estate (Regulation and Development) Act of 2016 (RERA) has significantly improved the sector by promoting transparency, accountability, and protecting homebuyers. Historically, India's real estate evolved from traditional systems to a regulated market under British rule, with RERA further transforming the landscape, especially in regions like Gurugram. RERA mandates project registration, accurate advertising, standardized carpet area definitions, timely project completion, and efficient dispute resolution. These measures ensure buyers have reliable information and protections, making the market more trustworthy. The COVID-19 pandemic heavily impacted the sector, causing project delays and financial difficulties. Despite these challenges, the residential sector rebounded post-pandemic due to increased demand and supportive government policies. Real estate is vital to India's economy, contributing significantly to GDP and employment. It is the second-largest employment generator after agriculture, providing around 5.5 crore jobs. The sector drives urbanization and infrastructure development, supports related industries, and offers significant investment opportunities, enhancing economic stability and growth. Overall, the survey paints a positive picture of RERA’s impact on the real estate sector, particularly in terms of increasing investor confidence and enhancing transparency and accountability. However, it also underscores the need for continuous improvements in awareness, enforcement, and procedural efficiency to fully realize the potential of RERA. By addressing these challenges and implementing the suggested improvements, RERA can further strengthen its role in transforming the Indian real estate landscape and ensuring a more secure and transparent environment for both residential and commercial real estate investments.

Artificial Intelligence (AI) Revolution in Real Estate and Real Estate Investment Trust (Reits): A Comprehensive Analysis (1989–2023)

Artificial Intelligence (AI) Revolution in Real Estate and Real Estate Investment Trust (Reits): A Comprehensive Analysis (1989–2023)

Corporate governance in real estate investment trusts: a systematic literature review and ideas for future research

Corporate governance in real estate investment trusts: a systematic literature review and ideas for future research

Research on the Development of Real Estate Investment in China Based on Bayesian Models

Research on the Development of Real Estate Investment in China Based on Bayesian Models

Deepfake at Star Isle Real Estate Group

This paper is a teaching case based on a fictitious company inspired by the actual experiences of employees working at a UK-based engineering group intended for use in information systems or business courses at the undergraduate or graduate level. In this teaching case, students are introduced to Star Isle Real Estate Group, Inc. (“Star Isle”), a fictitious American real estate investment, development, and management company developing a planned community named Spiral Galaxy with smart city features. The teaching case provides the opportunity for students to explore real-time video deepfakes.

Valuation of Real Estate Investment Trusts (REITs): An Empirical Analysis - Singapore

Valuation of Real Estate Investment Trusts (REITs): An Empirical Analysis - Singapore

A Real Option Analysis of the “Flats for Land” System - an Idiosyncratic Equity Financing Mechanism on Real Estate Investments

A typical real estate development project encounters an entrée capital expense for land purchase that is not immediately recovered until the allocated capital for the land acquisition is replaced with new capital that converts the land to a rentable building space. This article presents an idiosyncratic equity financing scheme that eliminates the sunk cost for a land purchase over a real estate development, within a real options framework. The study provides a model solution, numerical results of the option value, and the optimal investment threshold of a real estate development that is initiated through the “flats for land” scheme.

Construcții provizorii pentru facilități militare – soluții pentru creșterea adaptabilității și eficienței –

Temporary constructions involve structures that can be quickly assembled or disassembled and easily modified. Since the adaptability they offer is essential in the conduct of military actions, in the development of permanent infrastructure and last but not least in post-disaster interventions, they play a significant role in the defence infrastructure framework. Real estate investments of the Ministry of National Defense (MApN) must comply with both national legislative frameworks and departmental regulations. Temporary facilities are no exception. By analysing the regulations applicable for their implementation, the article briefly presents the typologies of temporary constructions defined by military regulations, the stages of technical documentation development and the conditions for authorising execution works, as well as some considerations on the opportunity to create a regulation dedicated to temporary military constructions.

Impact of Movement Control Order on Risk-Adjusted Performance of the Malaysian Real Estate Investment Trusts (M-REITs)

The first Movement Control Order (MCO) implemented by the Malaysian government from 18th March 2020 to 3rd May 2020 was unprecedented. Since Malaysia was only mildly affected by previous epidemics or pandemics unlike the COVID-19, studies of the pandemic impact on the performance of Malaysian firms and M-REITs in specific were limited. To close this gap, this study compares Sharpe ratio, Treynor ratio and Jensen Alpha ratio of 18 M-REITs for sub-periods before, during and after the MCO. Paired sample t-test results for all these three risk-adjusted performance measures consistently show that M-REITs significantly performed better during the MCO compared to before the MCO as well as after the MCO compared to before the MCO. The results suggest that the business model and portfolio of real estate managed by M-REITs are resilient against both systematic and unsystematic risk factors, and imply that the intrinsic value of M-REITs is not significantly affected by the market uncertainty caused by movement restriction. The findings also bolster investors’ confidence to include M-REITs as part of their diversified investment portfolio to achieve sustainable return performance in the post-Covid period. To remain resilient and sustainable, the management of M-REITs should diversify the portfolio of properties and real estate they managed since the movement restriction had varying repercussions on different types of real estate. Rooms for further diversification are justified by a larger percentage of M-REITs having positive Treynor ratios after the MCO sub-period if compared to positive Sharpe ratios. A well-diversified portfolio managed by an M-REIT can reduce unsystematic risk, which is part of the total risk measured by standard deviation, eventually moving towards a positive Sharpe ratio.

Temporary Buildings for Military Facilities – Solutions for Increasing Adaptability and Efficiency –

Temporary constructions involve structures that can be quickly assembled or disassembled and easily modified. Since the adaptability they offer is essential in the conduct of military actions, in the development of permanent infrastructure and last but not least in post-disaster interventions, they play a significant role in the defence infrastructure framework. Real estate investments of the Ministry of National Defense (MApN) must comply with both national legislative frameworks and departmental regulations. Temporary facilities are no exception. By analysing the regulations applicable for their implementation, the article briefly presents the typologies of temporary constructions defined by military regulations, the stages of technical documentation development and the conditions for authorising execution works, as well as some considerations on the opportunity to create a regulation dedicated to temporary military constructions.