The Inflation-Hedging Performance and Risk-Return Characteristics of Residential Property Investments in Gombe, Nigeria

This paper examines the inflation hedging performance separated into expected and unexpected inflation in Korean equity funds. In particular, using the bootstrap approach, we identify whether the inflation hedging performance is based on skill or luck. We use the equity funds of the average net asset value (NAV) over 5 billion Korean won and over the 80% stock position. The sample data cover the period from January 2002 to March 2015. The main findings are as follows. First, most equity funds demonstrate a hedging performance against the unexpected inflation shock and this hedging performance seems to come from the fund manager’s skill. Second, our findings are robust across the sieve bootstrap results for the serial dependence and heteroscedasticity. Third, the equity funds have slightly different inflation hedging performances depending on their investment style. Among the investment styles, small-cap, growth, or small and growth style funds demonstrate more hedging performance against unexpected inflation shock. This hedging performance seems to come from the fund manager’s skill. Finally, in the case of the funds separated by winner and loser, the winner funds have more hedging performance for unexpected inflation shock than the loser funds.

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The inflation-hedging characteristics of Malaysian residential property

International Journal of Housing Markets and Analysis ◽

10.1108/ijhma-10-2012-0053 ◽

2014 ◽

Vol 7 (1) ◽

pp. 61-75 ◽

Cited By ~ 14

Author(s):

Chyi Lin Lee

Keyword(s):

Emerging Market ◽

Ordinary Least Squares ◽

Residential Property ◽

Content Type ◽

Expected Inflation ◽

Hedging Effectiveness ◽

Long Run ◽

Different Types ◽

Short Run ◽

Inflation Hedging

Purpose – This study aims to extend the current literature by examining the inflation-hedging effectiveness of Malaysian residential property in the short run and long run. Malaysia is an emerging market and has some unique characteristics. Therefore, a dedicated study in this market is critical. Design/methodology/approach – The analysis of this study involves two stages. The first stage is to estimate the inflation-hedging ability of Malaysian residential property in the short run. The Fama and Schwert model was employed. Thereafter, the long-run inflation-hedging effectiveness was assessed by using a dynamic ordinary least squares (DOLS) model. Findings – The Fama and Schwert tests reveal that Malaysian residential property does provide some satisfactory hedge against the expected inflation component over the short run. However, variations are evident among different types of residential property. The DOLS results provide strong evidence to support that housing is an effective hedge against the expected inflation in the long run, whereas no comparable evidence is found for the unexpected inflation component. Practical implications – The findings enable more informed and practical investment decision-making regarding the role of housing in inflation risk management. Originality/value – This paper is the first study to offer empirical evidence of the inflation-hedging attributes of Malaysian residential property. Moreover, the inflation-hedging effectiveness of different types of residential property is also compared for the first time.

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International Real Estate Review

International Real Estate Review ◽

10.53383/100270 ◽

2018 ◽

Vol 21 (4) ◽

pp. 473-520

Author(s):

Kwabena Mintah ◽

Keyword(s):

Decision Making ◽

Qualitative Research ◽

Risk Management ◽

Thematic Analysis ◽

Management Tool ◽

Residential Property ◽

Structured Interviews ◽

Property Development ◽

Face To Face ◽

Risk Return

Studies have demonstrated the potential of real options analysis (ROA) in property development decision-making. However, practitioners have yet to accept, adopt and integrate ROA in property development decision-making in Australia. This paper therefore investigates how Australian residential property developers manage uncertainties and risks, examines flexibility as a risk management tool, and evaluates the receptiveness and acceptance of ROA for decision making. Data are collected through face-to-face semi-structured interviews with twelve participants, and analysed by using thematic analysis. The results indicate that a discount rate is insufficient for managing uncertainties and risks; rather, contingency is used. Receptiveness and acceptance of the RO theory are mixed due to lack of unanimity among responses. Some participants are positive about flexibility, while others are dismissive. Beyond quantitative ROA models, the findings suggest that practitioners are receptive to ROA, but concerns remain over adoption. Flexibility cases executed by some participants in practice indicate that practitioners are subconsciously using ROA. Therefore, it is possible that acceptance and adoption could be achieved in the future. Evidence of the use of contingency as a risk management tool challenges the long-held notions of risk-return relationships in property development and investment. This is initial evidence of qualitative research on ROA in practice within Australian property developments.

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A fresh look at the inflation-hedging attributes of residential property investments in emerging markets: evidence from Nigeria

Property Management ◽

10.1108/pm-03-2020-0020 ◽

2021 ◽

Vol 39 (3) ◽

pp. 419-438

Author(s):

Benjamin Gbolahan Ekemode

Keyword(s):

Emerging Markets ◽

Cointegration Test ◽

Residential Property ◽

National Bureau ◽

Ols Regression ◽

Content Type ◽

Long Run ◽

Short Run ◽

Inflation Hedging ◽

Unexpected Inflation

PurposeThis study reinvestigates the short-run and long-run inflation-hedging attributes of residential property assets in the Nigerian property market, based on variations in property types and location.Design/methodology/approachData used for this study comprised the holding period returns of three residential property types, namely bungalow, block of flats and detached house during 1999–2018. These were obtained from property practitioners in Lagos, Abuja and Port Harcourt, respectively. The inflation values obtained from the National Bureau of Statistics were split into actual, expected and unexpected components. Fama and Schwert’s (1977) ordered least square (OLS) regression was used to assess the short-term inflation hedging efficacy. Afterwards, the long-run link between residential property and inflation was examined using the Johansen and Juselius cointegration test.FindingsThe results showed that despite the variations in hedging behaviour across property types in the three locations, residential property assets significantly provided protection over actual, expected and unexpected inflation in the short run based on the OLS regression analysis. The result of the Johansen and Juselius cointegration test also established a long-term link between the residential property assets and actual inflation. However, mixed results were found on the link between residential property and expected and unexpected inflation, as some of the assets did not effectively hedge these inflation components in the long run.Practical implicationsThe study implied that the differences in property types and geographic locations are crucial in establishing the short-run and long-run inflation-hedging attributes of residential property assets and should be factored into consideration.Originality/valueThe paper complements the existing body of knowledge on the inflation-hedging attributes of residential property in emerging markets by determining the effects of variation in house types and geographic differences on the analysis.

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