Does it Pay to Diversify Real Estate Assets? - A Literary Perspective

Patrick Wilson () and Ralf Zurbruegg ()
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Ralf Zurbruegg: School of Commerce, University of Adelaide, Australia

No 2003-13, Centre for International Economic Studies Working Papers from University of Adelaide, Centre for International Economic Studies

Abstract: This paper examines the literature to date on the benefits of diversifying property assets internationally. Currently, there is no consensus on how much benefit can be derived from diversifying property portfolios globally. This is contrary to other financial assets where there seems to be common ground supporting holding international assets. In the real estate literature, there are two contrasting opinions as to the level of integration global property markets have and the advantages there are from holding international property assets. Specifically, this paper shows there are mixed outcomes irrespective of whether direct or indirect property assets are being examined, and this often depends on what type of statistical procedures are being applied. This study also provides some insights into more recent developments in the literature that might explain some of the diverse opinions that have been formed, these primarily being the inter-temporal instability of correlation coefficients and the impact that structural breaks can have upon statistical analyses.

Pages: 40 pages
Date: 2003-05
References: View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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