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Government real estate interventions and the stock market

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  • Akbari, Amir
  • Krystyniak, Karolina

Abstract

We study the spillover of government interventions in the real estate market to the stock market. We find that the more active mutual funds decreased ownership in equities with no short-term reversal. Furthermore, they increased ownership in the finance sector stocks without significant changes to their real estate equity holdings. The interventions affecting the riskiness of the finance sector stocks triggered a larger trading response than the ones focused on the real estate sector stocks’ cash flows. Overall, the spillover of the housing market shocks to the stock market seems to be materialized mostly through the discount rate channel.

Suggested Citation

  • Akbari, Amir & Krystyniak, Karolina, 2021. "Government real estate interventions and the stock market," International Review of Financial Analysis, Elsevier, vol. 75(C).
    • Handle: RePEc:eee:finana:v:75:y:2021:i:c:s1057521921000788
    DOI: 10.1016/j.irfa.2021.101742
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    Cited by:

    1. Muhammad Adil Rauf & Olaf Weber, 2022. "Housing Sustainability: The Effects of Speculation and Property Taxes on House Prices within and beyond the Jurisdiction," Sustainability, MDPI, vol. 14(12), pages 1-19, June.
    2. Kauskale Linda & Zvirgzdins Janis & Geipele Ineta, 2022. "The Real Estate Market and its Influencing Factors for Sustainable Real Estate Development: A Case of Latvia," Baltic Journal of Real Estate Economics and Construction Management, Sciendo, vol. 10(1), pages 171-199, January.

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    More about this item

    Keywords

    Government externality; Real estate; Institutional investors;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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