Comparative Analysis of Real Estate and Stock Markets as Inflation Hedges: Insights from East Asia and the United States

Li Wei, Wan-Hsiu Cheng, Wen-Yi Lee and Ting-Hsuan Tsai

Journal of Emerging Market Finance, 2025, vol. 24, issue 4, 486-508

Abstract: This study examines how real estate and stock markets can protect against inflation in East Asian countries compared to the United States. The study finds that stocks have a stronger relationship with inflation than housing in East Asian countries. In Hong Kong and Singapore, stock markets are influenced by unexpected sentiment, while in South Korea and Taiwan, they are aligned with expected inflation. In the real estate market, there is a long-term connection between housing prices and inflation in the United States, Hong Kong, and Singapore, but it is weak in the short term. However, the study finds that there is no clear link in Taiwan. This study emphasizes the importance of understanding the relationships between financial assets, especially as central banks address inflation and financial markets differently based on each country’s context. Investors in East Asia should be aware of these dynamics when managing inflation risks. JEL Codes: E6, F4

Keywords: Real estate; stocks; inflation; expected and unexpected inflation (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:sae:emffin:v:24:y:2025:i:4:p:486-508

DOI: 10.1177/09726527251358156

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