Predictability of Housing Prices in the times of Crises: New Trends, Methodologies, and Techniques
Housing assets are both a source of consumption and investment; hence, understanding the predictability of housing prices becomes critical for investment decisions and asset allocation (Dufitinema, 2021). Moreover, the prominence of predictability of housing prices raises when the world faces a severe crisis because the financial crisis has shown a substantial impact of the housing market on asset portfolios, private consumption, the banking system, mortgage markets, and the entire economy. In the last few decades we have witnessed several crises such as the global financial crisis, 9/11 events, Brexit, the United Kingdom’s (UK) exit from the European Union, the 2021 global energy crisis, and the Covid-19 pandemic.
The global financial crisis created by the subprime mortgage crisis in the United States resulted in an unexpected decline in the international housing and financial markets (Lee & Lee, 2018). At that time, the relevance of the housing market became prominent when it severely affected household wealth, the monetary system, real estate, and the construction industries. As a result, it causes a major drop in housing prices. The housing price collapse also brought to light the uncertainty linked with house price volatility and the transmission of such volatility to the remaining domains of the economy. Furthermore, the sudden decline in housing prices simulates the debt to home equity ratio—consequently, the risk exposure related to possession of property increases. Therefore, an increase in housing price volatility portrays higher chances of negative mortgage foreclosure losses and home equity. Such a scenario makes it necessary to explore the predictability of housing prices as the volatility of the housing market plays a major role in individual portfolio implications (Segnon et al., 2021).
In contrast, if we look at the times of recent crises, i.e., a pandemic of Covid-19. So it has been observed that the pandemic severely worsened almost all economic indicators, but housing prices remained unaffected during the pandemic. As per the statistics of IMF’s Global House Price Index (2020), twenty-three countries out of sixty countries experience an increase in housing prices by more than 5%. Furthermore, the house-price-to-income ratio representing housing affordability also increases, indicating that houses are becoming less affordable in these economies (Statista, 2022).
In the wake of the Covid-19 pandemic, house prices behave completely differently from the prior recessions. However, it has been expected that during collapses, property values fall rather than rising at exceptional rates. Furthermore, despite the country being gripped by a pandemic, official data indicate that they have been rising at their fastest rate and eventually fostering a housing affordability crisis. Therefore, it is critical to investigate this unanticipated development in the housing sector.
This special issue aims to explore the predictability of housing prices in times of crisis such as (not limited to) the global financial crisis, 9/11 events, Brexit, the United kingdom’s (UK) exit from the European Union, 2021 global energy crisis, and Covid-19 pandemic by using the advance methodologies and techniques.
List of topic areas
- Investigate if and why housing prices are rising in the Covid-19 pandemic.
- Analysing if it is riskier to invest in real estate in times of crisis.
- Uncertainty and daily predictability of housing returns and volatility.
- Is it possible for investors to utilize house assets to hedge against the danger of severe market volatility?
- House prices have behaved far differently in the wake of the Covid-19 downturn than the previous recession, such as the Global Financial Crisis, although this is poorly understood.
- Identify which housing price fluctuations have occurred in the market after the declaration of a pandemic. Analyse which major changes have been observed in the pre and during Covid-19.
- Identify the emerging trends for the housing market in present times.
- The effects of Covid-19 are worsening the affordable housing crisis. Identify steps that local businesses and governments can do to address the affordable housing problem.
- How to tackle the housing crisis after the Covid-19 pandemic.
- How will the predictability of housing prices help lessen the housing affordability crisis.
Submissions are made using ScholarOne Manuscripts. Registration and access are available at: http://mc.manuscriptcentral.com/ijhma
Author guidelines must be strictly followed. Please see: https://www.emeraldgrouppublishing.com/journal/ijhma#author-guidelines
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Submitted articles must not have been previously published, nor should they be under consideration for publication anywhere else, while under review for this journal.
Opening date for manuscripts submissions: 01/08/2022
Closing date for manuscripts submission: 03/12/2022
Closing date for abstract submission: 01/08/2022
Email for abstract submissions: [email protected]
Syed Ali Raza
Iqra University, Pakistan
Paris School of Business