{"title":"Residential Real Estate as a Potential Hedge of Capital Against Inflation","authors":"Rafał Wolski","doi":"10.2478/remav-2023-0004","DOIUrl":null,"url":null,"abstract":"ABSTRACT There is a belief among investors that real estate is an excellent way to protect capital from depreciation due to inflation. Research does not provide a clear answer as to whether this investors’ belief is correct, but some approaches indicate that simple econometric methods are not able, especially in the short term, to clearly indicate the existence of a relationship between inflation and property prices (Fogler, 1984). The purpose of the study –was to find the relationship between residential real estate prices and inflation in the Polish economic conditions. Methodology of the study - the study used cointegration analysis with the Engle - Granger test. The research was carried out in the period from the first quarter of 2009 to the fourth quarter of 2021. The real estate hedonic indices calculated by NBP (National Bank of Poland) and the actual and forecasted inflation rates published by the GUS (Central Statistical Office) and the NBP (National Bank of Poland) were used in the research. The result - the analysis led to a negative verification of the research hypothesis, as it could not be proved that real estate prices were related to the level of inflation during the researched period. Originality/value - the study fills a gap in the Polish market regarding the analysis of the possibility of using real estate as a hedge against inflation. The research concerned only the Polish market, but this issue has not been taken up for years, also in mature economies.","PeriodicalId":37812,"journal":{"name":"Real Estate Management and Valuation","volume":"31 1","pages":"36 - 42"},"PeriodicalIF":0.6000,"publicationDate":"2023-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"3","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Real Estate Management and Valuation","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.2478/remav-2023-0004","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q4","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 3
Abstract
ABSTRACT There is a belief among investors that real estate is an excellent way to protect capital from depreciation due to inflation. Research does not provide a clear answer as to whether this investors’ belief is correct, but some approaches indicate that simple econometric methods are not able, especially in the short term, to clearly indicate the existence of a relationship between inflation and property prices (Fogler, 1984). The purpose of the study –was to find the relationship between residential real estate prices and inflation in the Polish economic conditions. Methodology of the study - the study used cointegration analysis with the Engle - Granger test. The research was carried out in the period from the first quarter of 2009 to the fourth quarter of 2021. The real estate hedonic indices calculated by NBP (National Bank of Poland) and the actual and forecasted inflation rates published by the GUS (Central Statistical Office) and the NBP (National Bank of Poland) were used in the research. The result - the analysis led to a negative verification of the research hypothesis, as it could not be proved that real estate prices were related to the level of inflation during the researched period. Originality/value - the study fills a gap in the Polish market regarding the analysis of the possibility of using real estate as a hedge against inflation. The research concerned only the Polish market, but this issue has not been taken up for years, also in mature economies.
期刊介绍:
Real Estate Management and Valuation (REMV) is a journal that publishes new theoretical and practical insights that improve our understanding in the field of real estate valuation, analysis and property management. The aim of the Polish Real Estate Scientific Society (Towarzystwo Naukowe Nieruchomości) is developing and disseminating knowledge about land management and the methods, techniques and principles of real estate valuation and the popularization of scientific achievements in this field, as well as their practical applications in the activities of economic entities.