 Is real estate considered a safe asset in East Asia?Yiyun Yang and Leyi Chen Applied Economics Letters, 2022, vol. 29, issue 7, 604-614 Abstract: The demand for safe assets has increased in recent years. However, the supply of safe assets has remained concentrated in a few Western developed countries, and it cannot meet the demand for safe assets in East Asia. For historical and cultural reasons, we believe that real estate serves as safe assets in East Asia. To verify this issue, this study employs two sets of data, which, respectively, include three East Asian countries and eight Western countries, from 1998 to 2019 to construct two panel vector autoregressive (PVAR) models that we use to determine the differences between the housing markets in East Asian and Western nations. The empirical results show that house prices in East Asia tend to increase with economic policy uncertainty (EPU), indicating that real estate is a good hedge against uncertainty. In Western countries, however, real estate does not hold its value well in times of uncertainty. Therefore, this study confirms that real estate is a safe asset in East Asia, but not in Western countries. To lower the excessive price of houses in East Asian countries, this study recommends increasing the supply of other safe assets. Date: 2022 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:apeclt:v:29:y:2022:i:7:p:604-614 Ordering information: This journal article can be ordered from DOI: 10.1080/13504851.2021.1878091 Access Statistics for this article Applied Economics Letters is currently edited by Anita Phillips More articles in Applied Economics Letters from Taylor & Francis Journals |
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