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Real Estate and COVID-19
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Real Estate and COVID-19

A special issue of Journal of Risk and Financial Management (ISSN 1911-8074). This special issue belongs to the section "Financial Markets".

Deadline for manuscript submissions: closed (30 June 2021) | Viewed by 34518

Special Issue Editor

Prof. Dr. Desmond Tsang

E-Mail Website
Guest Editor
Desautels Faculty of Management, McGill University, Montreal, QC H3A 1G5, Canada
Interests: corporate governance; earnings management; financial reporting fraud; geographic strategy; real estate investment trusts

Special Issue Information

Dear Colleagues,

The recent pandemic brought upon by the COVID-19 health crisis has changed the world and the real estate landscape. Notably, the real estate sector has been adversely affected by the decline in economic activities. Moreover, COVID-19 has brought new changes, such as travel restrictions, social distancing, and work-from-home arrangements, that have influenced the direct real estate and its related equity markets in various unprecedented ways. In this Issue, we invite the submission of original articles examining the impact of the COVID-19 pandemic on the real estate market. We welcome any contemporary papers focusing on the pandemic’s influences on different aspects of the real estate market, including but not limited to real estate investment and equity returns, transaction volume and liquidity, property allocation and management, corporate governance, real estate listings and brokerage, and urban economics.

Prof. Dr. Desmond Tsang
Guest Editor

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. Journal of Risk and Financial Management is an international peer-reviewed open access monthly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1400 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • Real Estate Investment and Returns
  • Housing Transactions and Liquidity
  • Property Allocation and Management
  • Corporate Governance of Real Estate Entities
  • Real Estate Listing and Brokerage
  • Urban Economics

Published Papers (5 papers)

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Research

21 pages, 340 KiB  
Article
Analyst Forecasts during the COVID-19 Pandemic: Evidence from REITs
by Paul Anglin, Jianxin Cui, Yanmin Gao and Li Zhang
J. Risk Financial Manag. 2021, 14(10), 457; https://doi.org/10.3390/jrfm14100457 - 27 Sep 2021
Cited by 3 | Viewed by 3320
Abstract
The COVID-19 pandemic disrupts capital markets and confuses decision makers. This event represents an opportunity to better understand how financial analysts forecast earnings. We focus on forecasts for Real Estate Investment Trusts (REITs) in the United States, since REITs are relatively transparent during [...] Read more.
The COVID-19 pandemic disrupts capital markets and confuses decision makers. This event represents an opportunity to better understand how financial analysts forecast earnings. We focus on forecasts for Real Estate Investment Trusts (REITs) in the United States, since REITs are relatively transparent during normal times, and since the real estate sector, as a whole, displays wide variations in forecasts during the pandemic. Using data between October 2018 and November 2020, our regression analysis finds that the severity of the pandemic increases analysts’ forecast error and dispersion. Government interventions have an offsetting effect, which is relevant during the more severe times. These results are robust to various measures of the severity of the pandemic. We also find that the pandemic has differential effects across property types, where forecast error rises by more, for REITs, when focusing on Hospitality and Industrial properties, and dispersion rises by more, for REITs, when focusing on Hospitality, Retail, and Technology properties. Full article
(This article belongs to the Special Issue Real Estate and COVID-19)
24 pages, 514 KiB  
Article
The COVID-19 Pandemic and Commercial Property Rent Dynamics
by Roddy Allan, Ervi Liusman, Teddy Lu and Desmond Tsang
J. Risk Financial Manag. 2021, 14(8), 360; https://doi.org/10.3390/jrfm14080360 - 06 Aug 2021
Cited by 18 | Viewed by 8736
Abstract
This paper utilizes timely proprietary data to examine the contemporary impact of the COVID-19 pandemic on commercial property rent dynamics in the Asia–Pacific region. Given that the Asia–Pacific region was the first to be impacted by the public health crisis, it is important [...] Read more.
This paper utilizes timely proprietary data to examine the contemporary impact of the COVID-19 pandemic on commercial property rent dynamics in the Asia–Pacific region. Given that the Asia–Pacific region was the first to be impacted by the public health crisis, it is important to examine how the COVID-19 pandemic has affected the real estate markets in this region and to assess how the region has been recovering since then. Our regression analysis, controlling for different macroeconomic fundamentals and city and property type fixed effects, documents substantial declines in rents of approximately 15% during the first six months of 2020 across the Asia–Pacific commercial property market. We further observe that the most significant declines in rent occur in regions where exposure to the COVID-19 pandemic is the more severe, and in the retail property sector, where we have been observing continued declines of over 30%, with little recovery as of the second quarter of 2020. In additional analysis, we examine capital values and show that while capital targeting the retail property sector has been muted, there is some evidence showing capital flows into the residential and industrial sectors. We also show that fiscal stimuli imposed by governments have moderated the adverse impact of the pandemic. Overall, our study shows that while the effect of the COVID-19 public health crisis is detrimental to commercial real estate, its impact varies significantly across different regions and property sectors. Full article
(This article belongs to the Special Issue Real Estate and COVID-19)
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16 pages, 783 KiB  
Article
Geographic Scope and Real Estate Firm Performance during the COVID-19 Pandemic
by Xiaoling Chu, Chiuling Lu and Desmond Tsang
J. Risk Financial Manag. 2021, 14(7), 309; https://doi.org/10.3390/jrfm14070309 - 06 Jul 2021
Cited by 16 | Viewed by 4552
Abstract
This study examines the effect of geographic scope in mitigating the adverse impact of the COVID-19 pandemic in the real estate sector. Utilizing the Chinese setting over the two-month period in 2020 from the beginning of the outbreak to the successful containment of [...] Read more.
This study examines the effect of geographic scope in mitigating the adverse impact of the COVID-19 pandemic in the real estate sector. Utilizing the Chinese setting over the two-month period in 2020 from the beginning of the outbreak to the successful containment of the spread of virus, we show that while the pandemic has negatively impacted real estate firm returns, firms with broader geographic scope and more geographically diversified property allocations have managed to better endure the crisis. We further find that firms with higher leverage report lower returns during the pandemic irrespective of their geographic scope, but larger firms can lessen the adverse impact of the pandemic only if they have adopted a more diversified strategy. Overall, our study provides novel evidence on the benefit of diversification by demonstrating the importance of geographic scope and diversification at times of crises. Specifically, we show corporate diversification could be especially useful to mitigate the negative stock market reactions resulting from the pandemic. Moreover, diversification could even become essential for larger firms that are expected by the market to be more diversified. Full article
(This article belongs to the Special Issue Real Estate and COVID-19)
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17 pages, 1528 KiB  
Article
Housing Market in the Time of Pandemic: A Price Gradient Analysis from the COVID-19 Epicentre in China
by Ka Shing Cheung, Chung Yim Yiu and Chuyi Xiong
J. Risk Financial Manag. 2021, 14(3), 108; https://doi.org/10.3390/jrfm14030108 - 05 Mar 2021
Cited by 41 | Viewed by 8373
Abstract
While the outbreak of the COVID-19 disease has caused asset markets to experience an unprecedented spike of risk and uncertainty worldwide, the real estate market in many global cities appears to be immune to the adverse effects. How does COVID-19 affect urban housing [...] Read more.
While the outbreak of the COVID-19 disease has caused asset markets to experience an unprecedented spike of risk and uncertainty worldwide, the real estate market in many global cities appears to be immune to the adverse effects. How does COVID-19 affect urban housing markets? This study is a first attempt to identify the pandemic’s impact on house prices by applying a price gradient analysis to the COVID-19 epicentre in China. Considering microlevel housing transaction data in 62 areas from nine districts in Wuhan City from January 2019 to July 2020, the hedonic pricing and the price gradient models suggest that there was, respectively, a 4.8% and a 5.0–7.0% year-on-year fall in house prices immediately after the pandemic outbreak. Although house prices rebounded after the lockdown period, the gradient models show that the price gradients were flattened from the epicentre to the urban peripherals. The price premiums in high-density areas were also substantially discounted after the city’s lockdown. Our findings are robust to different model specifications. The implication is that the risk associated with the pandemic is localised and transitory in nature. People may be able to internalise the risk by residing in low-density residential areas. Full article
(This article belongs to the Special Issue Real Estate and COVID-19)
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15 pages, 705 KiB  
Article
How Does COVID-19 Affect House Prices? A Cross-City Analysis
by Bingbing Wang
J. Risk Financial Manag. 2021, 14(2), 47; https://doi.org/10.3390/jrfm14020047 - 24 Jan 2021
Cited by 31 | Viewed by 8533
Abstract
Using individual level transaction data and a revised difference-in-differences method with nonparametric smoothing, we study the effect of COVID-19 on house prices. The analyses are performed on the areas of Houston, Santa Clara, Honolulu, Irvine, and Des Moines in the US, which vary [...] Read more.
Using individual level transaction data and a revised difference-in-differences method with nonparametric smoothing, we study the effect of COVID-19 on house prices. The analyses are performed on the areas of Houston, Santa Clara, Honolulu, Irvine, and Des Moines in the US, which vary in the economic features and the implementation of stay home orders. The results show that only Honolulu experienced noticeable house price declines from the outbreak, suggesting that a heavier reliance on service industries might be correlated with higher vulnerabilities. Santa Clara and Irvine lead the house price increase rates, followed by Des Moines and Houston, indicating that stronger housing market fundamentals, better amenities and less dependence on service industries are associated with more positive house price effects. Full article
(This article belongs to the Special Issue Real Estate and COVID-19)
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