scholarly journals NON-PERFORMING PROPERTY LOANS AND ITS ORIGINATION IN THE REAL ESTATE FINANCE SYSTEM: CASE STUDY OF MALAYSIA

2021 ◽  
Vol 11 (1) ◽  
pp. 35-59
Author(s):  
Tham Kuen Wei ◽  
Rosli Said
Keyword(s):  
Real Estate ◽  
Financial Institutions ◽  
Developed Countries ◽  
Mortgage Market ◽  
Real Estate Finance ◽  
Islamic Banks ◽  
The Real ◽  
Finance System ◽  
The Real Estate ◽  
Secondary Mortgage Market

A healthy real estate finance system is crucial for any economy to grow and thrive. However, in recent years, the sustainability and soundness of the Malaysian Real Estate Finance System had been in question as the number of non-performing property loans had been on the rise. This paper looks into how property NPLs originate within the real estate finance system in Malaysia and its current performance in Malaysia. A descriptive research design was conducted utilizing in-depth case studies of Malaysia to examine Malaysia’s real estate finance system consisting of loan originators in the primary market and the special purpose vehicle involved at the secondary mortgage market where it was found that the Malaysian Real Estate Finance System is efficiently developed and on par with other developed countries with a robust primary mortgage market, effective secondary mortgage market and a vibrant capital market. Further analysis found that there are a total of 57 financial institutions that are property loan originators in Malaysia that consists of 26 Commercial Banks, 16 Islamic Banks, 2 International Islamic Banks, 11 Investment Banks, and 2 Special Financial Institutions. In terms of NPLs in Malaysia, property loans are the largest component of total NPLs in the country, and subsequent analysis found that the number of property NPLs in the country had been rising since 2015, after a long decade decline. This study warrants further research into the causes of property NPLs in the country so that the causes of property NPLs can be monitored as part of the country's strategic monetary policy to control and reduce the number of property NPLs in the country. Ultimately, this also helps to contribute towards a sound and robust real estate finance system in Malaysia.

scholarly journals The real estate risk fix: Residential insurance-linked securitization in the Florida metropolis

2020 ◽  
Vol 52 (6) ◽  
pp. 1131-1149 ◽  
Author(s):  
Zac J. Taylor
Keyword(s):  
Real Estate ◽  
Climate Risk ◽  
Real Estate Finance ◽  
Risk Capital ◽  
Public And Private ◽  
The Real ◽  
The Real Estate ◽  
Hurricane Wind ◽  
Asset Class ◽  
Spatial Fix

Insurance-linked securitization (ILS) plays an increasingly important role in the protection of valuable real estate markets from devaluation due to climate risk. This paper critically investigates ILS in the Florida context, where billions of dollars of residential hurricane wind exposure are securitized on behalf of re/insurers and institutional investors each year. Building on Harvey’s seminal concept of the spatial fix, it is argued that ILS represents a real estate risk fix. ILS transforms uncertain property catastrophe exposures into a liquid asset class, and in doing so turns institutional investor funds into re/insurance capacity for capital-hungry ‘peak peril’ re/insurers. Securitization helps to sustain the circulation of capital through risky built environments by absorbing the catastrophe exposures of mortgages and other forms of property-linked finance. In this way, ILS provides a fix for the Harveyian spatial fix, one which momentarily offsets growing environmental barriers to property-led accumulation. The paper shows how specific modes of urbanization and property finance, waves of ‘natural’ catastrophe, patterns of public and private institutional intervention, transnational flows of risk capital, and the creation of new market-making devices have constituted ILS as a provisional (if extractive) fix. To this end, the paper furthers our conceptual and empirical understandings of the operation of ILS and re/insurance at specific urban conjunctures, while also highlighting key dilemmas associated with securing the real estate-finance system from climate risk.

Economic Context of the Real Estate Bubble Crack

2020 ◽  
pp. 101-114
Author(s):  
Julián Mora Aliseda ◽  
Jacinto Garrido Velarde ◽  
Consuelo Mora
Keyword(s):  
Real Estate ◽  
Financial Institutions ◽  
Progressive Increase ◽  
Border Region ◽  
Practical Case ◽  
The Real ◽  
The Real Estate ◽  
Economic Context ◽  
Real Estate Bubble ◽  
Previous Decade

The crisis that shook the global financial institutions in 2007/08 revealed the weaknesses and irrationalities of a system that led millions of people, without compatible returns, to the category of “owners” of their home. During the previous decade, the absurd growth of supply in parallel with the progressive increase in real estate value, made housing “the hen of the golden eggs” of the regional and national economy: banks earn with a credit and families with the valuation of homes. This chapter examines the economic context in the crack of the real estate bubble and analyzes as a practical case the incidents of this crisis at international level in the border region of Extremadura.

scholarly journals Islamic Financial Institutions and Real Estate Cycle

2018 ◽  
Vol 2 (3) ◽  
pp. 16-23
Author(s):  
Siti Latipah Harun ◽  
Norazlina Abd Wahab ◽  
Rosylin Mohd Yusof
Keyword(s):  
Real Estate ◽  
Financial Institutions ◽  
Meta Analysis ◽  
The Real ◽  
The Real Estate ◽  
Financing Decisions ◽  
Critical Elements ◽  
Islamic Financial Institutions ◽  
Real Estate Cycle

The role of Islamic financial intuitions is essential in providing Islamic financing specifically to investors and stakeholders to invest in real estate. Therefore, understanding the link of the real estate cycle to the financial institutions is crucial. This is because the real estate cycle is one of the critical elements that will affect financing decisions and strategies of the banking sectors. Hence, this paper employed meta-analysis which aims (1) to systematically review survey the growing literature on real estate cycle and its links to the financial institutions; (2) to highlight possible cross-country trend analysis financial strategy among investors in dealing in with the real estate cycle. The results of the study suggest that during the peak cycle or period of crisis, most investors are risk-averse and increase the risk to the financing of real estate as well. This real estate cycle that occurs almost every 10 years in conventional real estate sectors also give some consequences to the Islamic financial institutions. This paper suggests to investors to understand the real estate cycle and its impact on Islamic financial institutions.

Statement of the Main Challenges of the Real Estate Market in China

2014 ◽  
Vol 1079-1080 ◽  
pp. 1199-1202
Author(s):  
Cheng Fan ◽  
Pei Chang ◽  
Ru Hua Xie
Keyword(s):  
Family Planning ◽  
Real Estate ◽  
The Elderly ◽  
Developed Countries ◽  
Real Estate Market ◽  
Chinese Family ◽  
Urbanization Process ◽  
The Real ◽  
The Real Estate ◽  
The Real Estate Market

As a component of market economy, real estate is running and developing in the environment of politics, society, finance and internation. The most important influencing factors of the present Chinese real estate industry are national policy, population, urbanization level and the income of the residents. The most direct factor which influence the real estate market transaction is the change of Chinese population structure since family planning. This paper elaborates mainly through the search for an aging population present situation and challenge of the urbanization process to the real estate market. It is concluded that less than 30years, the effective implement of Chinese “family planning” is completed an average of 80 years of aging process in the developed countries, the urbanization process will also continue to push forward in the future. However, because of the influence of demographic dividend to weaken, the speed will be slowed. Finally five suggestions were given from five aspects on the elderly physiological psychological characteristics, design, production, structure and sales of real estate, based on the new demographic factors challenge of the current Chinese regional real estate.

Disruptive potential of real estate crowdfunding in the real estate project finance industry

2018 ◽  
Vol 36 (5) ◽  
pp. 597-619 ◽  
Author(s):  
Nicolle Montgomery ◽  
Graham Squires ◽  
Iqbal Syed
Keyword(s):  
Real Estate ◽  
Disruptive Innovation ◽  
Project Finance ◽  
Real Estate Finance ◽  
Content Type ◽  
The Real ◽  
The Real Estate ◽  
Finance Industry ◽  
Real Estate Project ◽  
Disruptive Innovations

Purpose The purpose of this paper is to review the literature on the Disruptive Innovation Theory and on the disruptive potential of real estate crowdfunding (RECF) in the real estate finance industry, assessing whether RECF constitutes a potentially disruptive innovation to the real estate finance industry. Based on a review and synthesis of the literature, the paper advances an initial conceptual framework of core characteristics of disruptive innovations. This framework is used to examine the disruptive potential of RECF in the real estate finance industry. Design/methodology/approach This paper is a systematic literature review that synthesizes and analyzes relevant extant research articles retrieved from online databases. Findings Findings suggest that according to the theory of disruptive innovations, and the core characteristics of disruptive innovations, RECF is a potentially disruptive innovation to the real estate finance industry. RECF seems to generally align with the classic characteristics of disruptive innovations. A more comprehensive and systematic analysis, supported by empirical data, is necessary to evaluate whether and to what extent RECF constitutes a disruptive innovation to the real estate finance industry. Research limitations/implications This study has only captured and reviewed articles published and available in database searches. RECF is a nascent field that has recently begun receiving academic attention. Practical implications Real estate plays an integral part in the economy, and the way it is financed has become an increasingly important issue following the Global Financial Crisis. This paper provides useful insights for assessing whether and to what extent RECF may be disruptive to the real estate finance industry. Social implications RECF may potentially improve accessibility and affordability of real estate finance, thereby helping to address the problem of shortage of real estate project finance. Originality/value While RECF is portrayed in the academic and gray literature as a disruptive innovation, its disruptive potential is yet to be determined. This paper advances an initial conceptual framework of defining characteristics of disruptive innovations. This framework is used to evaluate RECF as a potentially disruptive innovation in the real estate project finance industry. This study forms a basis for future empirical examination of the disruptive potential of RECF in the real estate finance industry.

Sign in / Sign up

Export Citation Format

Share Document