The COVID-19 Pandemic and Commercial Property Rent Dynamics

An empirical investigation of investor sentiment and volatility of realty sector market in India: an application of the DCC-GARCH model

Understanding how an irrational investors' sentiment affects the realty market returns, especially during the pandemic, is imperative to take any financial decisions. The effect of investor sentiment on the movement of the realty market leading to market volatility is dynamically represented in a numerical form. The study incorporates daily market data and their implicit indices to construct a sector-specific investor sentiment index by using the principal component analysis method. To analyse the relationship between the variables, a quantitative approach is used by incorporating an econometric model-dynamic conditional correlation-generalized autoregressive conditional heteroskedasticity (DCC-GARCH). The directionality of the relationship between the variables is assessed by the Diebold-Yilmaz method. This study is done to investigate the return deviation in the realty sector due to sentiment impact during the pandemic in the Indian context. The findings indicate the existence of an asymmetric impact of the sentiment, leading to extreme volatility and returns in the realty sector. The results confirmed the presence of bi-directional relationship between asset returns and investor sentiment and quantified the relationship numerically. This study focused on the development, applicability, and validity of a sentiment index pertaining to the Indian realty sector. This study highlights the impact of a qualitative non-fundamental factor like sentiment as a measurable factor in determining the volatility on market returns.

Does the COVID-19 affect tenants’ adherence to lease obligations in rental market? Property managers’ perspective

Purpose

The purpose of this paper is to investigate how the pandemic affects tenants’ response to their lease obligations. This paper commences with examining the adopted tenant selection criteria during the COVID-19 pandemic. Then, this paper statistically tests if there is a relationship between selection criteria and response on whether the pandemic has effects or not. Then, this paper investigates the specific areas of impact on tenants’ ability to adequately keep to lease agreements in the Nigerian rental market. Finally, this paper proceeds to confirm if there is a relationship between selection criteria and the aspects of tenants’ deficiencies in rental obligations because of COVID-19.

Design/methodology/approach

Survey data, backed with interviews, is elicited from practicing estate surveyors and valuers and licensed property managers in Lagos, the largest property market in Nigeria and sub-Sahara Africa. Policy solutions and implications were solicited from personnel at the ministry of housing and senior professionals in the property sector. Data were analyzed using descriptive statistics, factor analysis and computer-aided qualitative data analysis, Atlas.ti.

Findings

Tenant’s health status is now accorded a priority together with others. Numbers of tenants are challenged with keeping to the prompt-rent-payment rule. Other areas of slight breaches included livestock rearing, subletting, alteration and repair covenants. Except for tenant reputation and tenant family size, there was no significant relationship between tenant’s health status consideration and the COVID-19 effect on tenant non-compliance with lease obligation. Tenants’ non-compliance with tenancy obligations has a connection with the tenants’ affordability, reputation, ability to sign an undertaking and health conditions during the pandemic. This paper recommends rental housing policy review.

Practical implications

It is recommended that the rental policy should be reviewed to give room for rental allowance or palliatives, private rental market regulation, exploration of the national housing fund and, if possible, social housing adoption policy in Nigeria.

Originality/value

This paper draws policymakers’ attention to the need to prepare for the future safety net that caters to citizenry welfare in challenging times.

PROPERTY MANAGEMENT ENABLED BY ARTIFICIAL INTELLIGENCE POST COVID-19: AN EXPLORATORY REVIEW AND FUTURE PROPOSITIONS

The Covid-19 pandemic outbreak across the globe has disrupted human life and industry. The pandemic has affected every sector, with the real estate sector facing particular challenges. During the pandemic, property management became a crucial task and property managers were challenged to control risks and disruptions faced by their organizations. Recent innovative technologies, including artificial intelligence (AI), have supported many sectors through sudden disruptions; this study was performed to examine the role of AI in the real estate and property management (PM) sectors. For this purpose, a systematic literature review was conducted using structural topic modeling and bibliometric analysis. Using appropriate keywords, the researchers found 175 articles on AI and PM research from 1980 to 2021 in the SCOPUS database. A bibliometric analysis was performed to identify research trends. Structural topic modelling (STM) identified ten emerging thematic topics in AI and PM. A comprehensive framework is proposed, and future research directions discussed.

COVID-19 Pandemic, Urban Resilience and Real Estate Prices: The Experience of Cities in the Yangtze River Delta in China

The COVID-19 pandemic has severely impacted the urban real estate market around the world. This study regards the impact of the pandemic as a quasi-natural experiment, using the Difference in Difference model (DID) to examine the short-term impact of this severe public health crisis on the residential land and housing markets in the Yangtze River Delta. The study found that the COVID-19 pandemic has had a significant inhibitory effect on the average price of urban residential land and houses in the Yangtze River Delta. Although the currency oversupply has caused real estate prices in all cities to rise, the price of urban residential land decreased by 13.7% for each additional unit of epidemic severity. The greater the city’s resilience to the pressure of the COVID-19 pandemic, the faster its residential land prices will recover. Empirical research on the new house samples confirmed this conclusion. Local governments should continue to improve their ability to manage abnormal conditions, not only to prevent the spread of the epidemic, but also to gradually promote the recovery of the urban economy, strengthen urban resilience to better respond to health crises, and achieve sustainable urban development.