An Overview of Macro-Economic Determinants of Real Estate Price in Nigeria

  • Authors

    • Musa Abubakar Alkali
    • Ibrahim Sipan
    • Muhammad Najib Razali
    2018-08-24
    https://doi.org/10.14419/ijet.v7i3.30.18416
  • Macro-economic, Real Estate, Real Estate Price, Residential Real Estate

  • Understanding  the relationship between real estate price and macroeconomic  variables in developed countries is appreciated first by considering the housing role in the macro economy. In modern capitalist economy, real estate sector remains the most important element of aggregate demand. Since residential real estate comprises the bulk of country’s tangible capital, the study on relationship between residential real estate price and macro economic variables are very significant for formulation of social and economic policies. The aim of this study  is to examines the relationship between real estate residential price and macroeconomic variables in Nigerian economy. The study identified GDP, inflation rate, exchange rate, interest rate and crude oil price as the major determinants of real estate price in Nigeria and they have significant impact on real estate market in general.

     

     

  • References

    1. [1] Nneji O, Brooks C, Ward CWR. House price dynamics and their reaction to macroeconomic changes. Econ Model. 2013;32(1):172–8.

      [2] Guerrieri V, Hartley D, Hurst E. Endogenous Gentrification and Housing-Price Dynamics. 2010;(No. 10-08):1–40.

      [3] Ali Akbar Naji Meidani, Maryam Zabihi MA. House prices , Economic Output , and Inflation Interactions in Iran House prices , Economic Output , and Inflation Interactions in Iran. Res Appl Econ. 2011;Vol. 3, No(January 2015).

      [4] Ciarlone A. House price cycles in emerging economies. Stud Econ Financ. 2015;32(1):17–52.

      [5] Razali MN. The dynamic of returns and volatility of Malaysian listed property companies in Asian property market. Int J Strateg Prop Manag. 2015;19(1):66–83.

      [6] KIAT GW, HAN HB, YET NC, HAO PK, HUI TS. Macroeconomic and Financial Determinants of Malaysian Residential Property Market. 2015;(September).

      [7] Adams Z, Füss R. Macroeconomic determinants of international housing markets. J Hous Econ. 2010;19(1):38–50.

      [8] Beltratti A, Morana C. International house prices and macroeconomic fluctuations. J Bank Financ. 2010;34(3):533–45.

      [9] Lai YW. Macroeconomic factors and index option returns. Int Rev Econ Financ. 2017;48(April 2015):452–77.

      [10] Killins RN, Egly PV, Escobari D. The impact of oil shocks on the housing market: Evidence from Canada and U.S. J Econ Bus. 2017;93:15–28.

      [11] Hon-chung H. HOUSING PRICE CYCLES AND AGGREGATE BUSINESS CYCLES : STYLISED FACTS IN THE CASE OF MALAYSIA Author ( s ): Hon-Chung Hui Source : The Journal of Developing Areas , Vol . 47 , No . 1 ( Spring 2013 ), pp . 149-169 Published by : College of Business , Tenness. 2018;47(1):149–69.

      [12] Granziera E, Kozicki S. House price dynamics: Fundamentals and expectations. J Econ Dyn Control. 2015;60:152–65.

      [13] Panagiotidis T, Printzis P. On the macroeconomic determinants of the housing market in Greece: a VECM approach. Int Econ Econ Policy. 2016;13(3):387–409.

      [14] Bureau TN, Press C. Global House Price Fluctuations : Synchronization and Determinants Author ( s ): Hideaki Hirata , M . Ayhan Kose , Christopher Otrok and Marco E Terrones Source : NBER International Seminar on Macroeconomics , Vol . 9 , No . 1 ( 2012 ), pp . 119-166 Publi. Vol. 9. 2018. 119-166 p.

      [15] Whelan S. Housing Markets and Macroeconomic Policy. Vol. 3, International Encyclopedia of Housing and Home. Elsevier Ltd.; 2012. 523-527 p.

      [16] Duan K, Mishra T, Parhi M. Space matters: Understanding the real effects of macroeconomic variations in cross-country housing price movements. Econ Lett. 2018;163:130–5.

      [17] Zhang H, Li L, Hui ECM, Li V. Comparisons of the relations between housing prices and the macroeconomy in China’s first-, second- and third-tier cities. Habitat Int. 2016;57:24–42.

      [18] Grum B, Govekar DK. Influence of Macroeconomic Factors on Prices of Real Estate in Various Cultural Environments: Case of Slovenia, Greece, France, Poland and Norway. Procedia Econ Financ. 2016;39(November 2015):597–604.

      [19] Ghorbani S. Forecasting the House Price for Ahvaz City : the Comparison of the Hedonic and Artificial Neural Network Models. 2017;5(19):29–45.

      [20] Gasparėnienė L, Remeikienė R, Skuka A. Assessment of the impact of macroeconomic factors on housing price level: Lithuanian case. Intellect Econ. 2016;10(2):122–7.

      [21] Ohno S, Shimizu J. Do exchange rate arrangements and capital controls influence international capital flows and housing prices in Asia? J Asian Econ. 2015;39:1–18.

      [22] Wabomba MS, Mutwiri MP, Fredrick M. Modeling and Forecasting Kenyan GDP Using Autoregressive Integrated Moving Average ( ARIMA ) Models. Sci J ofApplied Math Stat. 2016;4(2):64–73.

      [23] Tupenaite L, Kanapeckiene L, Naimaviciene J. Determinants of Housing Market Fluctuations: Case Study of Lithuania. Procedia Eng. 2017;172:1169–75.

      [24] Kimani NJ, Memba F. Factors Affecting the Growth of Real Estate in. 2017;4(2):531–49.

      [25] Almutairi H, T E-SM. Determinants of Housing Prices in an Oil Based Economy. Asian Econ Financ Rev. 2016;6(5):247–60.

      [26] Shi S, Jou JB, Tripe D. Can interest rates really control house prices? Effectiveness and implications for macroprudential policy. J Bank Financ. 2014;47(1):15–28.

      [27] Wheelock DC. U . S . Regional Housing Busts of the 1980s and 1990s. 2006;413–30.

      [28] Wang C-M, Lee H-M, Yang PH-C. The influence of macroeconomic variables on real estate—from the viewpoint of the middle class in Taipei. J Interdiscip Math. 2012;15(1):83–92.

      [29] Deng Y, Girardin E, Joyeux R. Fundamentals and the volatility of real estate prices in China: A sequential modelling strategy. China Econ Rev. 2016;

      [30] Nguyen TTB, Wang KM. Causality between housing returns, inflation and economic growth with endogenous breaks. J Chinese Econ Bus Stud. 2010;8(1):95–115.

      [31] Ben Omrane W, Savaşer T. Exchange rate volatility response to macroeconomic news during the global financial crisis. Int Rev Financ Anal. 2017;52:130–43.

      [32] Ngo T. Exchange rate exposure of REITs. Q Rev Econ Financ. 2017;64:249–58.

      [33] Yang L, Zhiqiang H. on Correlation between RMB Exchange Rate and Real Estate Price based on Financial Engineering. Syst Eng Procedia. 2012;3:146–52.

      [34] Zhang YJ, Wang J. Exploring the WTI crude oil price bubble process using the Markov regime switching model. Phys A Stat Mech its Appl. 2015;421(1):377–87.

      [35] Robert N. Killins, Peter V. Egly DE. The Impact of Oil Shocks on the Housing Market: Evidence from Canada and U.S. J Econ Business, Forthcoming). 2017;No. 80529(44017).

      [36] Nazlioglu S, Soytas U, Gupta R. Oil prices and financial stress: A volatility spillover analysis. Energy Policy. 2015;82(1):278–88.

      [37] Khiabani N. Oil inflows and housing market fluctuations in an oil-exporting country: Evidence from Iran. J Hous Econ. 2015;30:59–76.

      [38] Breitenfellner A, Crespo Cuaresma J, Mayer P. Energy inflation and house price corrections. Energy Econ. 2015;48:109–16.

      [39] Yiqi Y. TUSING PRICES IN THE NorwegiHE EFFECT OF OIL PRICES ON HOan School of Economics Acknowledgment. 2017;

      [40] Nazlioglu S, Gormus NA. Oil prices and real estate investment trusts ( REITs ): Gradual-shift causality and volatility transmission analysis. 2016;60:168–75.

      [41] Renigier-Biłozor M, Wiśniewski R. The Impact of Macroeconomic Factors on Residential Property Price Indices in Europe. Aestimum. 2012;(XLI Incontro di Studi del Ce.S.E.T.):149–66.

  • Downloads

  • How to Cite

    Abubakar Alkali, M., Sipan, I., & Najib Razali, M. (2018). An Overview of Macro-Economic Determinants of Real Estate Price in Nigeria. International Journal of Engineering & Technology, 7(3.30), 484-488. https://doi.org/10.14419/ijet.v7i3.30.18416