Real estate research in Asia-Past, Present and the Future

Presidential address delivered at the Second Asian Real Estate society Conference, 20-22 October, 1997, Hong Kong.

K. W. Chau

Department of Real Estate and Construction, The University of Hong Kong or hrrbckw@hkucc.hku.hk

This study reviews research papers on Asian real estate markets published in 17 real estate selected academic journals. Characteristics of these studies are identified and future directions of research are speculated upon.

Keywords

Asia, Real Estate.

Real Estate Asset Allocation and International Real Estate Markets

Gregory H. Chun

School of Business, University of Wisconsin, Madison, Wisconsin, 53706, USA or gchun@bus.ｗisc.edu

James D. Shilling

School of Business, University of Wisconsin, Madison, Wisconsin, 53076, USA or jshilling@bus.wisc.edu

In this paper we examine the institutional real estate ownership patterns of life insurance companies for 10 countries over the period 1986-96. The countries included are Australia, Austria, Belgium, France, Italy, the Netherlands, Spain, Sweden, the United kingdom, and the United States. We find that most institutional inventors worldwide have shifted out of real estate assets and into stocks and bonds over the last decade. We then investigate whether this behavior is the result of changing investor perception or a shift in stock market capitalization. To test this hypothesis, the paper derives measures of ex ante real estate returns following previous empirical work in finance. The results indicate that only a small proportion of what is driving institutional inventors' real estate portfolio decisions is actually explained by changing investor perceptions and lagged unexpected excess returns.

Keywords

Institutions, International Investment, Portfolio Diversification.

Aggregated Needs and the Location Choice of Households in Taipei

Chin-Oh Chang

Department of Land Economics, National Chengchi University, Taipei, Taiwan, or jacang@nccu.edu.tw

Shu-Mei Chen

Department of Land Economics, National Chengchi University, Taipei, Taiwan.
Shiawee X. Yang

College of Business Administration, Northeastern University, Boston, MA USA 02115 or syang@lynx.neu.edu

This paper examines the impact of aggregated needs of household members on the choice of housing location in Taipei, Taiwan, using a sample of 11,191 households and information collected from the 1990 Census of Population and Housing. Our results indicate that the choice of housing location is significantly affected impacted by the age, family origin, past housing location, education and occupation status, and the location of the workplaces of both spouses. We also find that this decision is more significantly influenced by the attributes of the male spouse than the female. However, among the households with a female household head, the female spouse characteristics are more likely to be significant. Our results also offer a snapshot of today's Taiwanese culture and shows that it is dramatically different from the commonly believed male-dominated traditional Chinese culture.

Keywords

Aggregated Needs, Location Choice, Probit Model

House Price Dynamics and Granger Causality: An Analysis of Taipei New Dwelling Market

Ming-Chi Chen and Kanak Patel

Department of Land Economy, University of Cambridge, Cambridge, UK Or kp10005@cus.cam.ac.uk

The primary purpose of this paper is to examine dynamic causal relationships between house price and its five determinants, including total household income, short-run interest rates, stock price index, construction costs, and housing completions, in Taipei new dwelling market. Granger causality tests, variance decomposition, impulse response functions based on the vector error-correction model are utilised. All five determinants Granger cause house prices, but only house prices and stock price index have a bilateral feedback effect. The variance decomposition results suggest that disturbances originating from current house prices inflict greatest variability (66 percent of variance) to future prices. The remaining 34 percent of the variance is explained by the five determinants. On the supply side, the construction costs and housing completions together explain about 10 percent of the house price variance. On the demand side, short-run interest rates, total household income and stock price index explain about 24 percent of the variance.

Keywords

Vector Error-correction Model, Granger Causality Test, Generalised Impulse Response Function.

Government Intervention and Performance of the Housing Sector in Urban China

Liu Hongyu

Institute of Real Estate Studies, Tsinghua University, BEIJING 100084, PRC or liuhy@tsinghua.edu.cn

The housing system in urban China is now undergoing a process of transition. Housing policy is one of the most popular topics under public discussion. This paper gives a brief review of the recently implemented housing policies and provides some basic information about the current situation of the housing market and housing system reform in urban China. It appears that China is very successful in improving the housing conditions of urban residents. However, there are still a number of problems related to housing disposition and consumption. Based on accepted criteria, this paper makes an assessment of the performance of current housing policy, resulting in several suggestions.

Keywords

China, Housing Market, Housing Policy, Housing System Reform

Industrial Rents and Land Values in the Sydney Property Market

Jinu Kim

Faculty of the Built Environment, The University of New South Wales, Sydney 2052 Australia or J.Kim@unsw.edu.au

This study aims to analyze the performance of industrial rents and land values in the Sydney property market. In the Sydney industrial property market, no growth of the rents and marginal growth of the land values in real terms has been seen between 1976 to 1996. It means that the overall return from an investment in industrial property is achieved largely from initial yield and current rental incomes, rather than rental growth and capital appreciation. The trends of real growth of industrial rents and land values have a similar cycle, but different magnitude (a or s) of fluctuation. It is concluded that industrial rent is determined more by demand than supply side factors, while land value is determined more by supply side factors than demand side factors.

Keywords

Rents, land values, Sydney industrial property market.

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