Evaluating the Relationship Between Global Stock Markets and Real Estate Markets Before and After the Coronavirus Pandemic
DOI:
https://doi.org/10.56830/IJAMS10202305Keywords:
Real estate, stock market, coronavirus pandemic, the impact of the stock market, property market, real estate prices, share prices, COVID-19 pandemicAbstract
The relationship between the stock market and the real estate market has been the focus of several studies in the past. The nature of this relationship continues to remain ambiguous, with results varying according to a country’s economic condition and the level of co-integration between the two markets. This paper reviews the variables that influence the behavior of the stock market and the property market in the United States and the UAE. It examines whether these markets appear to be interlinked in these countries. To make the research more relevant, we have also reviewed the relationship between these two markets and how they have been influenced by the Coronavirus pandemic. As per our findings, the key variables impacting this relationship include the wealth effect, the percentage of real estate assets owned by publicly-traded companies, the news, the number of mortgage-backed securities available in the market, and the amount of risk associated with these securities. Besides this, initial public offerings (IPOs) and market liquidity also play a vital role. Regarding the Coronavirus pandemic, the primary impacts of this health crisis appear to be limited to the short-term. The most significant effects include a rise in stock market volatility, a decline in buying and selling activity, and delays in real estate construction projects in response to government restrictions and new Coronavirus-related deaths.
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