Justice motivation theory in sustainable home purchases

2019 ◽  
Vol 13 (5) ◽  
pp. 809-823
Author(s):  
John Nadeau ◽  
Leslie Wardley ◽  
Alexander Dorohoi
Keyword(s):  
Real Estate ◽  
Cognitive Processing ◽  
Purchase Decision ◽  
Unique Contribution ◽  
Motivation Theory ◽  
Residential Real Estate ◽  
Content Type ◽  
Theory Of Justice ◽  
Functional Explanations ◽  
Justice Motivation

Purpose The purpose of this paper is to explore the understudied topic of sustainability as a factor in the Canadian residential real estate purchase decision using the unique lens of justice motivation theory. Design/methodology/approach Using a qualitative approach, the study draws on transcripts from 14 interviews with realtors and residential buyers in three different Ontario cities. This paper adopts an exploratory perspective to investigate justice-based motivations related to sustainability in the real estate decision process. Findings The research finds that the three requirements of justice motivation are satisfied in the context of a broad understanding of sustainability that includes social, economic and environmental dimensions. The residential real estate decision offers opportunities for sellers to appeal to those motivated by justice. Practical implications Policymakers should consider ways of easing these barriers for those consumers who a financially unable to satisfy their justice motivation when purchasing a home as well as bolstering regulatory enforcement. Sellers should clearly articulate functional explanations of features as well as benefits to enhance the cognitive processing of the sustainable home as a choice alternative. Originality/value This paper makes a unique contribution by arguing that the social psychology theory of justice motivation helps explain the role of sustainability in the residential real estate purchase decision-making process.

Real effects of real estate: evidence from unemployment rates

2020 ◽  
Vol 37 (4) ◽  
pp. 605-623
Author(s):  
Can Dogan ◽  
John Can Topuz
Keyword(s):  
Real Estate ◽  
Housing Prices ◽  
Real Economy ◽  
Residential Real Estate ◽  
Content Type ◽  
Unemployment Rates ◽  
The Real ◽  
Real Estate Price ◽  
Real Effects ◽  
Real Estate Prices

Purpose This paper aims to investigate the relationship between residential real estate prices and unemployment rates at the Metropolitan Statistical Area (MSA) level. Design/methodology/approach This paper uses a long time-series of MSA-level quarterly data from 1990 to 2018. It uses an instrumental variable approach to estimate the effects of residential real estate prices on unemployment rates using the geography-based land constraints measure of Saiz (2010) as the instrument. Findings The results show that changes in residential real estate prices do not have a causal effect on unemployment rates in the same quarter. However, it takes 9-12 months for an increase (decrease) in real estate prices to decrease (increase) unemployment rates. This effect is significant during both pre- and post-financial crisis periods and robust to control for the economic characteristics of MSAs. Research limitations/implications This paper contributes to the emerging literature that studies the real effects of real estate. Particularly, the methodology and the findings can be used to investigate causal relationships between housing prices and small business development or economic growth. The findings are also of interest to policymakers and practitioners as they illustrate how and when real estate price shocks propagate to the real economy through unemployment rates. Practical implications This study’s findings have important implications for academics, policymakers and investors as they provide evidence of a snowball effect associated with shocks to real estate prices: increasing (decreasing) unemployment rates following a decrease (increase) in real estate prices exacerbates the real estate price movements and their economic consequences. Originality/value This paper analyzes a significantly longer period, from 1990 to 2018, than the existing literature. Additionally, it uses the MSA-level land unavailability measure of Saiz (2010) as an instrument to explore the effects of residential real estate prices on unemployment rates and when those effects are observed in the real economy.

Examining why developers encourage foreign investment in local residential real estate in India

2016 ◽  
Vol 9 (4) ◽  
pp. 580-600
Author(s):  
Alok Tiwari ◽  
Mohammed Aljoufie
Keyword(s):  
Real Estate ◽  
Housing Market ◽  
United Arab Emirates ◽  
Foreign Investment ◽  
Large Population ◽  
Political Stability ◽  
Primary Data ◽  
Residential Real Estate ◽  
Content Type ◽  
Property Developers

Purpose The study aims to explore the role of non-resident Indian (NRI) investors into staggering local housing market and the efforts of developers and regulators to lure such investors. Design/methodology/approach Primary data for this exploratory study were assembled through a Google form-based questionnaire circulated over internet among NRIs residing in Kingdom of Saudi Arabia, USA, Singapore and United Arab Emirates, whereas the secondary data sources include the Government of India policy documents, World Bank data, Reserve Bank of India archives and reports published in reputed financial and others print media sources. Findings Indian housing market is confronted with a demand and supply mismatch at present. While a massive demand lingers at affordable housing segment, on the contrary, millions of housing inventories are also piling up. Consequently, property developers are attempting to lure the large population of NRIs residing at global cities. Study observes that sentimental attachment to the homeland, higher rate of returns, anticipated rental incomes are the major decisive elements. Additionally, growth in infrastructure, world-class amenities offered by developers, conformity to sustainability and political stability is the other critical reasons. Research limitations/implications On first hand, the study outlines a novel kind of foreign investment in Indian local residential real estate that is via NRI channel. Second, non-resident investors might surprise to the property developers and government through a realistic strategic approach. Originality/value Probably, the study is first of its type gazing at NRI investors, as a foreign investor, in the local residential real estate.

scholarly journals Extrinsic Factors which Influence the Buying Preferences of Residential Real Estate Customers

2019 ◽  
Vol 8 (S1) ◽  
pp. 64-66
Author(s):  
P. T. Rekha
Keyword(s):  
Real Estate ◽  
Waste Disposal ◽  
Purchase Decision ◽  
Residential Real Estate ◽  
Extrinsic Factors ◽  
Purchasing Decision ◽  
The Real ◽  
The Real Estate ◽  
Factors Influencing ◽  
Survey Questionnaires

A major effort on the part of Real estate firms is to increase and retain their customers and it is very essential that to know the factors influencing customers’ satisfaction and retention. This study is done with the purposes of identifying the extrinsic factors that affect the purchasing decision of the real estate customers of villas and apartments. This study uses survey questionnaires to obtain information from real estate consumers. The study was conducted in Thrissur district. The study found that the most influencing one in extrinsic factors which affect the purchase decision of real estate consumers is the availability of the facility of waste disposal. The study also discuss the opinion of real estate consumers about the changes needed in the structure of flats and villas in the light of natural calamities occurred in Kerala.

scholarly journals Spillovers between US real estate and financial assets in time and frequency domains

2020 ◽  
Vol 38 (6) ◽  
pp. 525-537 ◽  
Author(s):  
Aviral Kumar Tiwari ◽  
Christophe André ◽  
Rangan Gupta
Keyword(s):  
Real Estate ◽  
Housing Stock ◽  
Asset Returns ◽  
The United States ◽  
Subprime Crisis ◽  
Investment Horizon ◽  
Residential Real Estate ◽  
Content Type ◽  
Hedging Strategies ◽  
The Time Domain

PurposeAssessing the strength and time variation of spillovers between returns on residential real estate, real estate investment trusts (REITs), stocks and bonds in the United States. Spillovers reduce the benefits of portfolio diversification, especially in crisis times, when asset returns tend to be more correlated.Design/methodology/approachThe Diebold–Yilmaz approach in the time domain and the Baruník–Krehlík methodology in the frequency domain are used. The latter allows distinguishing spillovers generating only short-lived volatility from those with a more persistent effect.FindingsOn average, spillovers between housing, stock and bond returns are relatively modest and shocks to stock and bond markets affect housing returns more than the other way round, even though with variations over time. Spillovers in both directions are much stronger between REITs and stocks than between REITs and housing. Shocks originating in the housing market are most persistent, particularly in the aftermath of the subprime crisis.Practical implicationsHousing provides a hedge against volatility in financial (including REITs) markets. However, hedging strategies involving housing need to take into account potential tail events such as the GFC and the investment horizon.Originality/valueTo the best of the knowledge of the authors, this paper is the first to apply the Baruník–Krehlík methodology to real estate price spillovers. Although the Diebold–Yilmaz methodology has been used in several studies on spillovers between residential real estate and financial asset returns, this paper covers a new set of variables and time span.

Non-residential real estate and economic activity: the case of Greece

2014 ◽  
Vol 32 (1) ◽  
pp. 35-55
Author(s):  
Ilias Lekkos ◽  
Irini Staggel ◽  
Konstantinos Kefalas ◽  
Paraskevi Vlachou
Keyword(s):  
Real Estate ◽  
Business Cycle ◽  
Economic Activity ◽  
Significant Degree ◽  
Systematic Research ◽  
Research Approach ◽  
Residential Real Estate ◽  
Content Type ◽  
Key Variables ◽  
The Business Cycle

Purpose – The aim of the paper is to discuss developments in non-residential real estate in Greece. Design/methodology/approach – Given the lack of existing literature, the authors start by discussing at length the data sources available, and analyzing the stylized facts of non-residential real estate activity in Greece. Finally, the authors examine the degree of covariation (using the index of concordance methodology) between non-residential real estate and the business cycle. Findings – The results indicate that the structure of non-residential sector is highly fragmented into various sub-categories and at the initial stages of its developments, it was strongly affected by the preparations for the 2004 Athens Olympic Games. Finally, despite its small share of total GDP, non-residential real estate exhibits a significant degree of covariation with the business cycle. Practical implications – The extracted information may be a useful resource for those interested in the developments in non-residential real estate in Greece and the covariation of key variables with the business cycle. Originality/value – The paper constitutes a systematic research approach for the role of non-residential real estate in the Greek economic activity.

An analysis of auction strategies in apartment sales

2018 ◽  
Vol 11 (2) ◽  
pp. 202-223 ◽  
Author(s):  
Rosane Hungria-Gunnelin
Keyword(s):  
Real Estate ◽  
List Price ◽  
Selling Price ◽  
Residential Real Estate ◽  
Data Set ◽  
Content Type ◽  
Bidding Strategies ◽  
Ascending Auctions ◽  
Jump Bidding ◽  
Positive Effect

Purpose This paper aims to empirically test the effect of list price and bidding strategies in ascending auctions of residential real estate. Design/methodology/approach Three regression models are estimated, using a unique data set from 629 condominium apartments in the inner-city of Stockholm, Sweden, sold between January 2010 and December 2011. Findings The results show that jump bidding has the predicted effect of reducing competition by scaring off bidders. However, a higher average bid increment leads to a higher selling price. Furthermore, results show that a fast auction in terms of average time between bids acts to increase the probability of so-called auction fever as both the number of bidders and the selling price are positively correlated with the speed of the auction. While the average behavior of all auction participants, in terms of jump bidding and time between bids, significantly affects auction outcomes, differences in strategies applied by winners and losers show mixed results. The results of this study with respect to sellers’ list price strategy show that underpricing is an ineffective strategy in terms of enticing more bidders to participate in the auction. Furthermore, underpricing is not sufficient to have a positive effect on the selling price. Originality/value This paper is one of the first papers to empirically analyze how different bidding strategies affect the outcome of residential real estate auctions in terms of competition and the final selling price.

The user cost of housing in the Baltic states

2017 ◽  
Vol 10 (1) ◽  
pp. 17-34
Author(s):  
Darius Kulikauskas
Keyword(s):  
Real Estate ◽  
Interest Rates ◽  
Housing Prices ◽  
Residential Real Estate ◽  
Baltic States ◽  
Data Set ◽  
Content Type ◽  
Real Estate Markets ◽  
User Costs ◽  
The Baltic

Purpose This paper aims to use the user costs approach to identify the periods of over- and under-valuation in the Baltic residential real estate markets. Design/methodology/approach Three alternative estimates of the user costs of homeownership in the Baltics are computed: one that does not discriminate between the leveraged and unleveraged parts of a house and the other that takes loan-to-value ratios into account. Findings The approach successfully identifies the overheating that took place in the Baltic real estate markets prior to the crisis of 2009 and shows that there is significant upward pressure for the housing prices in the Baltics in the low interest rate environment that became prevalent ever since. Research limitations/implications The paper uses only the current values of the fundamentals to compute the user costs. The framework could be augmented to account for the expected future developments of the fundamentals. Practical implications The macroprudential policy makers should monitor the developments in the Baltic residential real estate markets closely and be ready to act because an increase in the price-to-rent ratios might seem sustainable, given the current low interest rates, but could potentially bring harmful volatility when the monetary policy normalises. Originality/value This paper builds a novel data set on the real estate markets of the Baltic countries and is the first to derive the user costs of homeownership in the region. It is also among the first to identify periods of housing price misalignments from their fundamental values in the Baltic States.

scholarly journals Does immigration affect residential real estate prices? Evidence from Australia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Narvada Gopy-Ramdhany ◽  
Boopen Seetanah
Keyword(s):  
Real Estate ◽  
Housing Prices ◽  
Past Research ◽  
Housing Demand ◽  
Interstate Migration ◽  
Causality Analysis ◽  
Residential Real Estate ◽  
Content Type ◽  
Long Run ◽  
Real Estate Prices

Purpose This study aims to investigate the effect of immigration on housing prices in Australia both at the national and regional levels. Design/methodology/approach Data for eight Australian states on a quarterly basis from 2004–2017 is used. To study the possible dynamic and endogenous relationship between housing prices and immigration, a panel vector autoregressive error correction model (PVECM) is adopted. Findings Analysis of the results indicates that in the short run immigration positively and significantly affects housing prices, whereas in the long run no significant relationship was observed between the two variables. From the regional breakdown and analysis, it is discerned that in some states there is a significant and positive effect of immigration on residential real estate prices in the long run. Causality analysis confirms that the direction of causation is from immigration to housing prices. Practical implications The study illustrates that immigration and interstate migration, as well as high salaries, have been causing a rise in housing demand and subsequently housing prices. To monitor exceedingly high housing prices, local authorities should be controlling migration and salary levels. Originality/value Past research studies had highlighted the importance of native interstate migration in explaining the nexus between immigration – housing prices. In this study, it has been empirically verified how immigration has been affecting the locational decisions of natives and subsequently how this has been affecting housing prices.

Pricing office rents in Sydney CBD: testing the water on automated rent reviews

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Olga Filippova ◽  
Jeremy Gabe ◽  
Michael Rehm
Keyword(s):  
Asset Pricing ◽  
Real Estate ◽  
Percentage Error ◽  
Residential Real Estate ◽  
Pricing Models ◽  
Content Type ◽  
Market Rent ◽  
Absolute Percentage Error ◽  
Asset Pricing Models ◽  
Out Of Sample

PurposeAutomated valuation models (AVMs) are statistical asset pricing models omnipresent in residential real estate markets, where they inform property tax assessment, mortgage underwriting and marketing. Use of these asset pricing models outside of residential real estate is rare. The purpose of the paper is to explore key characteristics of commercial office lease contracts and test an application in estimating office market rental prices using an AVM.Design/methodology/approachThe authors apply a semi-log ordinary least squares hedonic regression approach to estimate either contract rent or the total costs of occupancy (TOC) (“grossed up” rent). Furthermore, the authors adopt a training/test split in the observed leasing data to evaluate the accuracy of using these pricing models for prediction. In the study, 80% of the samples are randomly selected to train the AVM and 20% was held back to test accuracy out of sample. A naive prediction model is used to establish accuracy prediction benchmarks for the AVM using the out-of-sample test data. To evaluate the performance of the AVM, the authors use a Monte Carlo simulation to run the selection process 100 times and calculate the test dataset's mean error (ME), mean absolute error (MAE), mean absolute percentage error (MAPE), median absolute percentage error (MdAPE), coefficient of dispersion (COD) and the training model's r-squared statistic (R2) for each run.FindingsUsing a sample of office lease transactions in Sydney CBD (Central Business District), Australia, the authors demonstrate accuracy statistics that are comparable to those used in residential valuation and outperform a naive model.Originality/valueAVMs in an office leasing context have significant implications for practice. First, an AVM can act as an impartial arbiter in market rent review disputes. Second, the technology may enable frequent market rent reviews as a lease negotiation strategy that allows tenants and property owners to share market risk by limiting concerns over high costs and adversarial litigation that can emerge in a market rent review dispute.

Value of waiting – option pricing as a tool for residential real estate fund divestment management

2014 ◽  
Vol 32 (5) ◽  
pp. 400-414 ◽  
Author(s):  
Jussi Vimpari ◽  
Seppo Junnila
Keyword(s):  
Real Estate ◽  
Option Pricing ◽  
Investment Decision ◽  
Capital Investments ◽  
Residential Real Estate ◽  
Content Type ◽  
Industry Standard ◽  
Option Pricing Model ◽  
Embedded Case Study

Purpose – The value of waiting to invest has been acknowledged in management of real capital investments. Investment decision should be undertaken only if it can justify giving up the value of the option to wait; the same logic is proposed here to be applicable on divestment management of a real estate fund. The purpose of this paper is to test option pricing to quantify the option to wait in a residential real estate fund divestment. It is argued that standard industry valuation practices miss the value of active fund management that should be included when planning a fund divestment strategy. Design/methodology/approach – Dynamic programming, specifically binomial option-pricing model is suggested to complement the current industry standard valuation approaches. The approach is tested in an embedded case study where assets of a residential real estate fund are valuated using the model. Findings – Option pricing can provide risk-neutral quantified value whether an apartment building portfolio should be divested in a single transaction or in multiple transactions over time. In the case study, an option value of 6.6 per cent was found for a residential real estate portfolio. Originality/value – This study is the first of its kind to propose that value of waiting to divest is an important element when planning a real estate fund divestment. The approach proposed in this study risk-neutrally calculates the value appreciation from the range of the potential values. This provides the decision-maker a deeper understanding of the implications regarding the chosen line of action.

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