Risk and Real Estate Investment: An International Perspective

Geurts, Tom G.; Austin, Jaffe

doi:10.1080/10835547.1996.12090817

Cited by 45 publications

(3 citation statements)

References 15 publications

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“…This study examines the risk-reduction options that institutional characteristics point to in internationally diversified portfolios. Institutional investors should take note of this issue, according to those who think that there may be repercussions on returns given the vast differences in institutional structure between different countries [17].…”

Section: Geurts Et Al [1996] Lists Several Institutional Consideratio...mentioning

confidence: 99%

Investment Factors and Decision Behavior Affecting to Real Estate Investment Decision

Rank¹,

Pitroda²,

Bhavsar³

et al. 2023

IJSREM

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This study examines industry's significance to a nation's economic development and to the expansion of its many stakeholders cannot be overstated. Out of all the sector's stakeholders, the investor is the one who takes on the most risk. When it comes to an investor's propensity to invest in the actual market, certain elements have the biggest impact on their motivation and behaviour, while others have the least. Real estate returns vary depending on the area. This is supporting the expanding field of Real Estate research. The behavioural factor like over confidence, education, and religion was examined, and it was discovered that religious factors impact Indian investors' decisions to invest in real estate. This is advancing the field of research in the real estate industry. The goal of this investigation is to discover the tactics exploited by Indian developers to optimize monetary benefit from multiple real estate investments. A critical element to take into account when making investments in Indian property investment is the financial side. The way of decision for investment are dependent on various variable that differ from case to case, nature of the area, financial capability of investor, risk and policies, which make the behaviour of real estate dynamic through uncertainty and volatility. This makes the decision making for all the investors in real estate difficult. Various investment models present in real estate investment decision making are identified and compared in terms of variable associated, cater to level of risk, assumption, type of decision, metrics and investment types. This research International Journal of Scientific Research in Engineering and Management (IJSREM) Volume: 07 Issue: 03 | March - 2023 Impact Factor: 7.185 ISSN: 2582-3930 © 2023, IJSREM | www.ijsrem.com DOI: 10.55041/IJSREM18222 | Page 2 will serve as a guide to investors, developers and builders. It will provide a prior knowledge to take a decision on investment in commercial properties of offices and retail. Keywords: Financial Study, Real Estate, Investor’s Decision, Real Estate Investment, Real Estate Investment Factor, Real Estate Sector.

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Section: Geurts Et Al [1996] Lists Several Institutional Consideratio...mentioning

confidence: 99%

Investment Factors and Decision Behavior Affecting to Real Estate Investment Decision

Rank¹,

Pitroda²,

Bhavsar³

et al. 2023

IJSREM

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show abstract

“…Real estate market is one of the important input resources markets of the national economic system. This market has its own characteristics different from other input resource markets because, according to Foldvary and Jaffe (2010), the real estate market is developed on land with distinctive characteristics, supply and demand for real estate are less elastic compared to prices and the operation of the real estate market is subject to government policies and control.…”

Section: Review Of Literature On Macroeconomic Variable Effects On Re...mentioning

confidence: 99%

Macroeconomic Dynamics and the Causal Effect on Residential Real Estate Investment Returns in Abuja and Lagos, Nigeria

Gamu,

Agava

2023

Pathways to Sustainable Real Estate Investment in Sub Saharan African Countries: The 22nd Annual AfRES Conference

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This study evaluated the performance of residential real estate investment and the causal linkages between important macroeconomic variables and real estate investment returns in Abuja and Lagos cities in Nigeria. A survey research design was employed using questionnaire to collect real estate transaction data from 2008 to 2022 from estate surveying and valuation firms in the study areas. The macroeconomic data used were retrieved from the archives of the Central Bank of Nigeria and National Bureau of Statistics. The rental and capital value data collected were used to construct rental and capital value indices using index number model and total returns on investment using holding period return model. Granger Causality test was employed to determine the causal effect of macroeconomic factors on residential real estate returns in the study areas. The finding of this study revealed among others that there was a progressive upward movement in rental and capita values of residential real estate investment in the study areas between 2008 and 2022. On the basis of total return and risk-adjusted return performances, residential real estate performed slightly better in Lagos with an average total return of 15.28% as against 15.20% in Abuja. On the other hand, Abuja performed better in terms of risk-adjusted return. Of the six macroeconomic variables analysed, only inflation rate, unemployment rate and real GDP per capita were found to have statistically significant causal effect on residential real estate investment returns in the study areas. The study recommended that whereas it is profitable for investors to invest their money in residential real estate in the study areas due to the positive rental and capital value growth potential, the government should implement economic policies that are capable of ameliorating the high rate of inflation and unemployment in the study areas.

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“…Related literature on the effect of macroeconomic variables on real estate investment RE market is one of the important input resources markets of the national economic system. This market has its own characteristics different from other input resource markets because, according to Foldvary and Jaffe (2010), the RE market is developed on land with distinctive characteristics, supply and demand for RE are less elastic compared to prices and the Residential real estate investment returns operation of the RE market is subject to government policies and control. The macroeconomic environment of any given nation no doubt has significant impact on RE investment performance which in turn influences RE investment decision-making amongst existing and potential investors.…”

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confidence: 99%

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

Agava,

Gamu

2024

JPIF

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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.

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Risk and Real Estate Investment: An International Perspective

Cited by 45 publications

References 15 publications

Investment Factors and Decision Behavior Affecting to Real Estate Investment Decision

Investment Factors and Decision Behavior Affecting to Real Estate Investment Decision

Macroeconomic Dynamics and the Causal Effect on Residential Real Estate Investment Returns in Abuja and Lagos, Nigeria

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

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