Articles:
Institutional Factors and Real Estate Returns - A Cross Country Study Author: Hsien-hsing Liao and Jianping (J. P.) Mei Start Page:
21 Abstract: This
study provides an empirical study on the relationship between
institutional factors and real estate returns.
Using data from both developed and emerging market countries, our
empirical results show that institutional factors do influence real
estate returns and these factors may not be fully priced.
We find that when controlling return volatility and level of
economic growth, a higher property return is expected in countries where
the economy is more efficient and has more economic freedom.
Our results support the view that the combination of
"lumpiness" of real estate investment and the volatile nature
of international capital flows may expose property investors to extra
investment risk, which needs to be compensated. Our results also
indicate that an improvement in a country's economic efficiency and
economic freedom may reduce property variance risk thus enhancing
property returns. |