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Does virtual hype matter for real estate in the AI era?

Author

Listed:
  • Qicheng, Yang
  • Chang, Chun-Ping
  • Yin, Hua-Tang

Abstract

The characteristics of production, corporate governance, and consumption in a hypothetical and well-developed metaverse space have been widely discussed. However, few studies have looked at how the metaverse hype changes investment preferences and then affects the real economy. Our research reveals that a one-point increase in metaverse hype leads to about a 0.25-point increase in real estate investment sentiment in China, even after accounting for the potential regime shift led by the ChatGPT-interest surge. A bunch of extended investigations are conducted, one of which, notably, shows that the positive effect of increased metaverse hype is symmetrical to the negative effect of decreased hype. Against the backdrop that the real estate industry plays a fundamental role in China's economy due to the insufficient-collateral problem, we offer several suggestions for investors and financial regulators in line with our findings.

Suggested Citation

  • Qicheng, Yang & Chang, Chun-Ping & Yin, Hua-Tang, 2026. "Does virtual hype matter for real estate in the AI era?," Pacific-Basin Finance Journal, Elsevier, vol. 99(C).
    • Handle: RePEc:eee:pacfin:v:99:y:2026:i:c:s0927538x26001782
    DOI: 10.1016/j.pacfin.2026.103232
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    Keywords

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    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R33 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Nonagricultural and Nonresidential Real Estate Markets

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