Safe-haven investments against stock returns in Pakistan: a role of real estate, gold, oil and US dollar

Imran, Zulfiqar Ali; Ahad, Muhammad

doi:10.1108/ijhma-12-2021-0134

Cited by 4 publications

(1 citation statement)

References 66 publications

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“…In another study, the real estate was analysed along with the dollar and gold regarding equity returns from January 2011 to December 2020, by using the wavelet coherence technique. The study found out weak association in the short run and the co-movement between equity returns and gold significantly affects real estate and oil price (Imran and Ahad, 2022). In Pakistan, housing prices have been significantly affected by the changes in the monetary policy from January 2011 to December 2016, the study further found out that easy monetary policy produces a rise in house prices and vice versa, albeit inflation has a strong impact on the housing prices, on the other hand stock market index did not affect much (Umar et al , 2019).…”

Section: Literature Reviewmentioning

confidence: 99%

The impact of oil price on housing prices: an empirical analysis of Pakistan

Ahmed

Visas

Ul-haq

2022

IJHMA

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Purpose This study aims to explore the impact of oil prices on housing prices using Pakistani annual data from 1973 to 2021. Design/methodology/approach The Augmented Dickey–Fuller (ADF) and Phillips–Perron (PP) tests were used for unit-root testing, whereas the johansen-juselius test was used for cointegration. For the short-run, the error correction model is used and the robustness of the model is checked using the dynamic ordinary least squares (DOLS) and fully modified OLS (FMOLS). The cumulative sum (CUSUM) and CUSUM of Squares tests were used to check the stability of the model, while parameter instability was confirmed by the Chow breakpoint test. Finally, the impulse response function was used for causality. Findings According to the findings, rising oil prices, among other things, have an impact on housing prices. Inflation is the single most important factor affecting not only the housing sector but also the entire economy. Lending and exchange rates have a significant impact on housing prices as well. The FMOLS and DOLS results suggest that the OLS results are robust. According to the variance decomposition model, housing prices and oil prices are bidirectionally related. The Government of Pakistan must develop a housing policy on a regular basis to develop the country’s urban housing supply and demand. Practical implications It is suggested that in Pakistan, the rising oil prices is a problem for the housing prices as well as many other sectors. The government needs to explore alternative ways of energy generation rather than the heavy reliance on imported oil. Originality/value Pakistan has been experiencing rising oil prices and housing prices with the rapid urbanisation and rural–urban migration. The contribution to the literature is that neither attempt (as to the best of the authors’ knowledge) has been made to check the impact of rising oil prices on housing sector development in Pakistan.

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Section: Literature Reviewmentioning

confidence: 99%

The impact of oil price on housing prices: an empirical analysis of Pakistan

Ahmed

Visas

Ul-haq

2022

IJHMA

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Nexus between Chat GPT usage dimensions and investment decisions making in Pakistan: Moderating role of financial literacy

Ullah,

Ismail,

Islam Khan

et al. 2024

Technology in Society

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Relationship between housing, oil, gold and stock markets: evidence from UK and Norway

Büyükkara,

Özgüler,

Hepsen

2023

IJHMA

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Purpose The purpose of this study is to explore the intricate relationship between oil prices, house prices in the UK and Norway, and the mediating role of gold and stock prices in both the short- and long-term, unraveling these complex linkages by employing an empirical approach. Design/methodology/approach This study benefits from a comprehensive set of econometric tools, including a multiequation vector autoregressive (VAR) system, Granger causality test, impulse response function, variance decomposition and a single-equation autoregressive distributed lag (ARDL) system. This rigorous approach enables to identify both short- and long-run dynamics to unravel the intricate linkages between Brent oil prices, housing prices, gold prices and stock prices in the UK and Norway over the period from 2005:Q1 to 2022:Q2. Findings The findings indicate that rising oil prices negatively impact house prices, whereas the positive influence of stock market performance on housing is more pronounced. A two-way causal relationship exists between stock market indices and house prices, whereas a one-way causal relationship exists from crude oil prices to house prices in both countries. The VAR model reveals that past housing prices, stock market indices in each country and Brent oil prices are the primary determinants of current housing prices. The single-equation ARDL results for housing prices demonstrate the existence of a long-run cointegrating relationship between real estate and stock prices. The variance decomposition analysis indicates that oil prices have a more pronounced impact on housing prices compared with stock prices. The findings reveal that shocks in stock markets have a greater influence on housing market prices than those in oil or gold prices. Consequently, house prices exhibit a stronger reaction to general financial market indicators than to commodity prices. Research limitations/implications This study may have several limitations. First, the model does not include all relevant macroeconomic variables, such as interest rates, unemployment rates and gross domestic product growth. This omission may affect the accuracy of the model’s predictions and lead to inefficiencies in the real estate market. Second, this study does not consider alternative explanations for market inefficiencies, such as behavioral finance factors, information asymmetry or market microstructure effects. Third, the models have limitations in revealing how predictors react to positive and negative shocks. Therefore, the results of this study should be interpreted with caution. Practical implications These findings hold significant implications for formulating dynamic policies aimed at stabilizing the housing markets of these two oil-producing nations. The practical implications of this study extend to academics, investors and policymakers, particularly in light of the volatility characterizing both housing and commodity markets. The findings reveal that shocks in stock markets have a more profound impact on housing market prices compared with those in oil or gold prices. Consequently, house prices exhibit a stronger reaction to general financial market indicators than to commodity prices. Social implications These findings could also serve as valuable insights for future research endeavors aimed at constructing models that link real estate market dynamics to macroeconomic indicators. Originality/value Using a variety of econometric approaches, this paper presents an innovative empirical analysis of the intricate relationship between euro property prices, stock prices, gold prices and oil prices in the UK and Norway from 2005:Q1 to 2022:Q2. Expanding upon the existing literature on housing market price determinants, this study delves into the role of gold and oil prices, considering their impact on industrial production and overall economic growth. This paper provides valuable policy insights for effectively managing the impact of oil price shocks on the housing market.

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Safe-haven investments against stock returns in Pakistan: a role of real estate, gold, oil and US dollar

Cited by 4 publications

References 66 publications

The impact of oil price on housing prices: an empirical analysis of Pakistan

The impact of oil price on housing prices: an empirical analysis of Pakistan

Nexus between Chat GPT usage dimensions and investment decisions making in Pakistan: Moderating role of financial literacy

Relationship between housing, oil, gold and stock markets: evidence from UK and Norway

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