Macroeconomic Theory and The Implication for Real Estate Cycles

Oyedele J.B.

Macroeconomic Theory and The Implication for Real Estate Cycles

Oyedele J.B. * §

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Obafemi Awolowo University, Ile-Ife, Osun State, Nig...

Macroeconomic Theory and The Implication for Real Estate Cycles

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Abstract

The paper examines the implication of macroeconomic theory on real estate cycles. Certain macroeconomic factors such as increasing real interest rates, lack of credit availability and increasing product market competition as a result of higher rate of returns in the financial markets tend to dissuade real estate investments while favouring short term investors. It has been established that macroeconomic variables such as nominal interest rates explain almost 60% of the variation in real estate prices. Other macroeconomic variables such as the slope of the term structure, expected and unexpected inflation, industrial production, and the spread between high-grade and low-grade bonds act as a proxy for economic risk factors that are rewarded, ex ante, in the stock market. Hence a good understanding of macroeconomic theory and cyclical movement is a significant factor for efficient portfolio management and the resultant implication on investment decision making.

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Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

Data Availability

Not applicable for this article.

How to Cite This Article

Oyedele J.B.. 2019. "Macroeconomic Theory and The Implication for Real Estate Cycles". Global Journal of Management and Business Research, Global Journal of Management and Business Research - F: Real estate, Event, Tourism Management & Transporting GJMBR-F Volume 19 (GJMBR Volume 19 Issue F3).

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GJMBR Volume 19 Issue F3

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Journal Specifications

Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

Keywords

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Classification

GJMBR-F Classification JEL Code: L85

Submission ReceivedDecember 15, 2018
Peer Review Double Blind
Handling Editor
Accepted January 1, 2019
Published January 15, 2019

Version of record

v1.2

Issue date

December 19, 2019

Language

English

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Article Matrices

Total Score: 148

Country: Nigeria

Subject: Global Journal of Management and Business Research

Authors: Oyedele J.B. (PhD/Dr. count: 0)

View Count (all-time): 308

Total Views (Real + Logic): 589

Total Downloads (simulated): 36

Publish Date: 2019 01, Tue

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