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1 – 2 of 2Niharika Mehta, Seema Gupta and Shipra Maitra
Foreign direct investment in the real estate (FDIRE) sector is required to bridge the gap between investment needed and domestic funds. Further, foreign direct investment is…
Abstract
Purpose
Foreign direct investment in the real estate (FDIRE) sector is required to bridge the gap between investment needed and domestic funds. Further, foreign direct investment is gaining importance because other sources of raising finance such as External Commercial Borrowing and foreign currency convertible bonds have been banned in the Indian real estate sector. Therefore, the objective of the study is to explore the determinants attracting foreign direct investment in real estate and to assess the impact of those variables on foreign direct investments in real estate.
Design/methodology/approach
Johansen cointegration test, vector error correction model along with variance decomposition and impulse response function are employed to understand the nexus of the relationship between various macroeconomic variables and foreign direct investment in real estate.
Findings
The results indicate that infrastructure, GDP and tourism act as drivers of foreign direct investment in real estate. However, interest rates act as a barrier.
Originality/value
This article aimed at exploring factors attracting FDIRE along with estimating the impact of identified variables on FDI in real estate. Unlike other studies, this study considers FDI in real estate instead of foreign real estate investments.
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Keywords
Niharika Mehta, Seema Gupta and Shipra Maitra
India is one of those countries that are severely affected by the COVID-19 pandemic. With the upsurge in the cases, the country recorded high unemployment rates, economic…
Abstract
Purpose
India is one of those countries that are severely affected by the COVID-19 pandemic. With the upsurge in the cases, the country recorded high unemployment rates, economic uncertainties and slugging growth rates. This adversely affected the real estate sector in India. As the relation of the housing market with the gross domestic product is quite lasting thus, the decline in housing prices has severely impacted the economic growth of the nation. Hence, the purpose of this paper is to gauge the asymmetric impact of COVID-19 shocks on housing prices in India.
Design/methodology/approach
Studies revealed the symmetric impact of macroeconomic variables, and contingencies on housing prices dominate the literature. However, the assumption of linearity fails to apprehend the asymmetric dynamics of the housing sector. Thus, the author uses a nonlinear autoregressive distributed lag model to address this limitation and test the existence of short- and long-run asymmetry.
Findings
The findings revealed the long- and short-run asymmetric impact of the COVID-19 outbreak and the peak of the COVID-19 on housing prices. The results indicate that the peak of COVID-19 had a greater impact on housing prices in comparison to the outbreak of COVID-19. This can be explained as prices will revert to normal at a speed of 0.978% with the decline in the number of COVID-19 cases. Whereas the housing prices rise at a rate of 0.714 as a result of government intervention to deal with the ill effects of the COVID-19 outbreak. Moreover, it can be inferred that both the outbreak and peak of COVID-19 will lead to a minimal decline in housing prices, while with the decline in the number of cases and reduction in the impact of the outbreak of COVID, the housing prices will rise at an increasing rate.
Originality/value
To the best of the authors’ knowledge, this is the first study to understand the impact of the outbreak and peak of COVID-19 on the housing prices separately.
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