The Macroeconomy and the Real Estate Market: Evidence from the Global Financial Crisis and the COVID-19 Pandemic Crisis

This paper investigates the impact of the macroeconomy on Vietnam real estate market (REM). The research data were collected by the authors on a quarterly basis, from the third quarter of 2004 to the last counterpart of 2020. The authors utilize the Autoregressive Distributed Lag (ARDL) approach. The results reveal that REM is negatively influenced by the macroeconomy (interest rate and global crisis) in the short run and long run. This result is completely consistent with the wealth effect theory, the Austrian Business Cycle Theory (ABC), as well as the Arbitrage Pricing Theory (APT). However, the findings in this paper are valuable empirical evidence on the impact of the macroeconomy on REM in Vietnam, a developing country with relatively nascent REM. In particular, this study has achieved novelty compared to previous studies by finding the negative impact of the global crisis on REM, where the global crisis is defined to include the global financial crisis and the Coronavirus (COVID-19) pandemic crisis. Based on this, Vietnam needs to operate macroeconomic policies flexibly and in accordance with each period in order to develop REM in a stable and sustainable manner.