Real Estate Finance

A special issue of International Journal of Financial Studies (ISSN 2227-7072).

Deadline for manuscript submissions: closed (31 December 2018) | Viewed by 18604

Special Issue Editor

Special Issue Information

Dear Colleagues,

The problems in financial markets that hit the global economy back in 2008 reflect a pulling back from what the literature calls ‘surrogate securitization’, where investors are willing to buy debt that has been assigned high credit ratings by the credit rating agencies, regardless of the underlying assets used in the securitization. Investors basically delegate due diligence to the rating agencies. Utilizing ratings to help evaluate the riskiness of securities is a normal part of the securitization process. When new securities arise, investors may need to exercise more caution as rating agencies themselves learn about the appropriate risk to attach to the new instruments.

The abovementioned risks concern many stakeholders, given that disruptions in the ability to securitize assets have the potential to affect a much broader set of assets and the whole economy, and increase the cost and reduce the availability of credit that consumers and businesses rely on. It is well known that financial institutions can play an important role in providing financing for many classes of borrowers. This critical issue is that financing that supports responsible subprime lending still has a major role to play. Moreover, the real estate market has an important bearing on both macroeconomic developments and financial stability. Therefore, the systematic monitoring of real estate market developments and prospects are very important for both a comprehensive analysis of the macroeconomic conditions and prospects of the global economy and the effective exercise of central banks’ supervisory tasks.

The themes expected to be covered focused mainly (but are not limited) to the following topics:

  • Financial and geopolitical challenges for real estate markets
  • Links between real estate and financial markets
  • Finance and housing market crises
  • New financial tools for real estate markets
  • Real estate markets and economic policy efficiency
  • Statistical methodologies and the nexus between financial and real estate markets
  • Evaluating private and public development and investment in real estate markets
  • Residential vs. commercial real estate finance
  • Financial and real estate cycles
  • Real estate bubbles
  • Financial and real estate risks
  • Real estate investment portfolios
  • Financial distress and real estate prices
  • The mathematics of real estate finance
  • The econometrics of real estate finance

Prof. Dr. Nicholas Apergis
Guest Editor

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Keywords

  • real estate markets
  • financial markets
  • banks
  • financial stability
  • financial tools
  • mathematics and econometrics in real estate markets
  • economic policy
  • bubbles
  • real estate portfolios

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Published Papers (3 papers)

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Research

32 pages, 393 KiB  
Article
Wealth Effects on Household Final Consumption: Stock and Housing Market Channels
by Yener Coskun, Burak Sencer Atasoy, Giacomo Morri and Esra Alp
Int. J. Financial Stud. 2018, 6(2), 57; https://doi.org/10.3390/ijfs6020057 - 5 Jun 2018
Cited by 19 | Viewed by 7402
Abstract
The study primarily explores the linkage between wealth effects, arising from stock and housing market channels, and household final consumption for 11 advanced countries over the period from 1970 Q1 to 2015 Q4. As a modelling strategy, we employ regression analysis through the [...] Read more.
The study primarily explores the linkage between wealth effects, arising from stock and housing market channels, and household final consumption for 11 advanced countries over the period from 1970 Q1 to 2015 Q4. As a modelling strategy, we employ regression analysis through the common correlated effects mean group (CCEMG) estimator, as well as Durbin–Hausman cointegration and Dumitrescu and Hurlin (2012) causality tests. The study provides various pieces of evidence through whole-panel and country-level analyses. In this respect, we find that consumption is mostly explained by income and housing wealth is positively and significantly correlated with consumption. As counter-intuitive evidence, we detect a negative linkage between consumption and stock wealth. The evidence also suggests a long-run cointegration relationship among consumption, income, interest rates, housing wealth, and stock wealth. Moreover, we find bidirectional causality between consumption and income, stock wealth, housing wealth, and interest rates. Overall, the evidence implies that housing wealth, rather than stock wealth, is the primary source of consumption growth in advanced countries. Full article
(This article belongs to the Special Issue Real Estate Finance)
23 pages, 489 KiB  
Article
Housing, Housing Finance and Credit Risk
by Alessandra Canepa and Fawaz Khaled
Int. J. Financial Stud. 2018, 6(2), 50; https://doi.org/10.3390/ijfs6020050 - 9 May 2018
Cited by 3 | Viewed by 6010
Abstract
This paper investigates the determinants of credit risk from a broad perspective. Particular attention is given to the role of housing affordability and household indebtedness. However, the impact of credit market developments and regulations is also closely examined. Using a large panel of [...] Read more.
This paper investigates the determinants of credit risk from a broad perspective. Particular attention is given to the role of housing affordability and household indebtedness. However, the impact of credit market developments and regulations is also closely examined. Using a large panel of countries it is found that housing affordability and household fragility significantly affect the risk of banks’ loan portfolios. In addition, an analysis of the conditional quantiles of non-performing loan ratios reveals that financial institutions in countries with greater levels of financial liberalization and less regulated markets also experience greater credit risk. Full article
(This article belongs to the Special Issue Real Estate Finance)
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13 pages, 750 KiB  
Article
Real Estate Risk Analysis: The Case of Caserma Garibaldi in Milan
by Leopoldo Sdino, Paolo Rosasco and Sara Magoni
Int. J. Financial Stud. 2018, 6(1), 7; https://doi.org/10.3390/ijfs6010007 - 3 Jan 2018
Cited by 6 | Viewed by 4405
Abstract
The global economic crisis and deep financialization processes recently suffered by the real estate market have exposed the latter to further and greater risks. Against this, the importance of real estate risk management has noticeably grown within the dynamics of both markets, real [...] Read more.
The global economic crisis and deep financialization processes recently suffered by the real estate market have exposed the latter to further and greater risks. Against this, the importance of real estate risk management has noticeably grown within the dynamics of both markets, real estate and finance. Therefore, the aim of this paper is to develop a comprehensive tool for the risk rating that will consider both the systematic and idiosyncratic risks possibly incurred during a real estate operation, in order to deliver their actual magnitude. It will be composed of 33 criteria whose weights are determined through the application of an analytic hierarchic process on a panel of market operators. This tool is primarily addressed to investors since it allows making strategic decisions while being supported by an analytical procedure that also ensures transparency of the conduct for the rating. An application of the presented tool within the decision-making procedure of the re-functionalization of a former barracks in Milan’s city center is then described; this case study will also constitute an opportunity to highlight the strong relationship that occurs between the profitability of an operation and the risk incurred. Full article
(This article belongs to the Special Issue Real Estate Finance)
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