Real Estate Markets and Lending: Does Local Growth Fuel Risk?

Zurek, Maximilian

doi:10.1007/s10693-021-00358-9

Cited by 4 publications

(3 citation statements)

References 48 publications

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“…In the realm of real estate and financial stability, the "financial accelerator" model by Wang et al (2022) illustrates how fluctuations in housing prices can magnify impacts on corporate debt and macroeconomic stability. Contrasting this, Zurek (2022) contended that rising real estate prices minimally affect the credit portfolios of savings banks. Examining the global landscape, Nguyen and Bui (2020) identified a positive relationship between the real estate market and stock market volatility in Vietnam.…”

Section: Real Estate Debt and Financial Stabilitymentioning

confidence: 99%

The Influence of Airbnb Announcements on North American Capital Markets: Insights for Stakeholders

Tavor

2024

IJFS

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This research investigates the burgeoning peer-to-peer (P2P) economy, exemplified by platforms such as Airbnb, and its implications within the North American context. The study focuses on understanding the repercussions of Airbnb announcements on capital markets, concentrating specifically on the travel and tourism sector and the real estate sector. The findings unveil a discernible augmentation in index returns preceding the announcement’s publication in both sectors. However, a notable divergence manifests post-announcement: while the real estate sector sustains an upward trajectory in returns, the travel and tourism sector experiences a post-publication decline. These results underscore the strategic advantage available to investors with early access to Airbnb announcements, enabling them to capitalize on excess profits. Furthermore, the broader investor community can leverage the insights gleaned from Airbnb announcements for financial gains. A nuanced examination of regression results reveals the substantial impact of macroeconomic variables on index returns in both the travel and tourism sector and the real estate sector. These insights contribute to a more nuanced understanding of the intricate dynamics shaping these economic domains.

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Section: Real Estate Debt and Financial Stabilitymentioning

confidence: 99%

The Influence of Airbnb Announcements on North American Capital Markets: Insights for Stakeholders

Tavor

2024

IJFS

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“…Mei and Wen (2020) find that the current "land finance" in China keeps land prices high, increasing the early capital investment of real estate enterprises, thus increasing their financing demand and further increasing the risk of debt default. Zurek (2022) studies the German real estate market and finds that historical increasing real estate Real estate enterprises' status prices make real estate enterprises overly optimistic about the market, thus increasing the existing default risk.…”

Section: Factors Affecting the Debt Default Risk Of Real Estate Enter...mentioning

confidence: 99%

The influence mechanism of real estate enterprises' status on debt default risk

Liu,

Zhou,

Sun

2023

JPIF

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PurposeThe aim of this study is to analyze the influence mechanism of real estate enterprises' status on debt default risk and explore the heterogeneity effect of the characteristics of enterprises.Design/methodology/approachAgainst the background of the “three red lines” regulation of the financing of real estate enterprises and the COVID-19 pandemic, the authors select 123 real estate enterprises listed on China's Shanghai and Shenzhen A-shares markets from the first quarter of 2021 to the second quarter of 2022 as a research sample. The social network analysis method and Z-score financial risk early warning model are used to measure real estate enterprises' status and debt default risk. The authors construct a panel regression model to analyze how the status of real estate enterprises influences their debt default risk.FindingsThe results show that the status of real estate enterprises negatively and significantly affects their debt default risk. Economic policy uncertainty and financing constraints play negative moderating and mediating roles, respectively. Further research has found that the effect of real estate enterprises' status on debt default risk is characterized by heterogeneity in equity characteristics, i.e. it is significant in the sample of nonstate-owned enterprises but not in the sample of state-owned enterprises.Practical implicationsIt is helpful for real estate enterprises to attach importance to the value of social networks, and the authors provide policy suggestions for real estate enterprises to constantly improve their risk management systems.Originality/valueUsing economic policy uncertainty as the moderating variable and financing constraints as the mediating variable, the authors analyze how the status of real estate enterprises influences debt default risk, which contributes to a better understanding of the formation of the debt default risk of real estate enterprises.

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“…The problems of collateral for credit processes and the financial market's smooth functioning were developed and presented in the paper by Patrick Schaffner, Angelo Ranaldo and Kostas Tsatsaronis "Euro repo market functioning: collateral is king" (2019) [29], in the European Systemic Risk Board's report "Vulnerabilities in the residential real estate sectors of the EEA countries" (February 2022) [16], in papers Maximilian Zurek "Real estate markets and lending: does local growth fuel risk?" [46], Satyajit Das "Markets insight: misuse of collateral creates systemic risk" [16] and others. Continuing this research further, we suggest new analytical concepts and tools for a deeper understanding the systemic financial risk.…”

Section: Literature Reviewmentioning

confidence: 99%

Systemic Financial Risks of China’s Economy: Self-Enforcing Cycles

Unkovska¹,

Taruta²,

Grydzhuk³

2022

ФКДПТП

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The paper focuses on the acute problems of systemic financial risk in the economy of China posed by the real estate sector. In the event of collapse, the world's second-largest economy of this Asian giant, deeply integrated into the global system, can trigger spillover effects and a new global economic crisis. It is therefore important to deepen understanding of the internal mechanisms of systemic financial risk accumulation in the Chinese economy. We research the microfinancial roots of systemic financial risk and macroeconomic mechanisms of its accumulation and materialisation after it has reached a critical level. Microfinancial roots of systemic risks are connected with excessive growth of financial leverage. We suggest a mathematical model of the optimal level of financial leverage and its safety threshold for the companies in the real sector including the construction and development sector. On the macro level, the paper presents a comprehensive dynamic scheme of non-linear relationships in the real estate industry, which unwind self-reinforcing cycles and lead to the accumulation of systemic financial risks. The main driving force of these processes is the institutional mechanism that we call collateral accelerator. Under certain conditions, it plays the role of a powerful internal destabiliser of the economic system and provokes the unwinding of self-reinforcing cycles in the real estate market, the households’ finance, development companies, and the banking system. The results of the research can help shape the optimal macroprudential regulatory measures to minimise systemic financial risks and ensure financial stability without suppressing economic growth.

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Real Estate Markets and Lending: Does Local Growth Fuel Risk?

Cited by 4 publications

References 48 publications

The Influence of Airbnb Announcements on North American Capital Markets: Insights for Stakeholders

The Influence of Airbnb Announcements on North American Capital Markets: Insights for Stakeholders

The influence mechanism of real estate enterprises' status on debt default risk

Systemic Financial Risks of China’s Economy: Self-Enforcing Cycles

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