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Financialization of Real Estate Markets as a Macroeconomic Trend of the Digital Economy

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  • S. G. Sternik

    (Institute of Economic Forecasting, Russian Academy of Sciences)

  • N. B. Safronova

    (Moscow State University of Civil Engineering)

Abstract

— The changes in the world economy since the early 1990s, such as the globalization of financial and commodity markets, deregulation of the financial sector, and its growing role in the economy, have led to significant changes in the real estate market, traditionally one of the most conservative markets. The process of financial institutions’ entering the top players in the real estate market is most commonly referred to in various researches as financialization. In the last decade, this trend has been supplemented by processes associated with disruptive technologies that have emerged within the rapidly developing fintech industry and offer a number of mechanisms that make investing in real estate (crowdfunding), using real estate (sharing), and turnover of digital choses in action secured by real estate assets (tokenization) significantly more democratic. As a result, the excess of the total capitalization of the financial component of the market (including the growing digital share) over the total value of real estate assets can exceed reasonable limits and become an independent cause of another crisis similar to the 2006–2008 crisis in the United States.

Suggested Citation

  • S. G. Sternik & N. B. Safronova, 2021. "Financialization of Real Estate Markets as a Macroeconomic Trend of the Digital Economy," Studies on Russian Economic Development, Springer, vol. 32(6), pages 676-682, November.
    • Handle: RePEc:spr:sorede:v:32:y:2021:i:6:d:10.1134_s1075700721060149
    DOI: 10.1134/S1075700721060149
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    References listed on IDEAS

    as
    1. Rodrigo Fernandez & Manuel B. Aalbers, 2020. "Housing Financialization in the Global South: In Search of a Comparative Framework," Housing Policy Debate, Taylor & Francis Journals, vol. 30(4), pages 680-701, July.
    2. Fulong Wu & Jie Chen & Fenghua Pan & Nick Gallent & Fangzhu Zhang, 2020. "Assetization: The Chinese Path to Housing Financialization," Annals of the American Association of Geographers, Taylor & Francis Journals, vol. 110(5), pages 1483-1499, September.
    3. I. Socoloff, 2020. "Subordinate Financialization and Housing Finance: The Case of Indexed Mortgage Loans’ Coalition in Argentina," Housing Policy Debate, Taylor & Francis Journals, vol. 30(4), pages 585-605, July.
    4. Gabriel Fauveaud, 2020. "The New Frontiers of Housing Financialization in Phnom Penh, Cambodia: The Condominium Boom and the Foreignization of Housing Markets in the Global South," Housing Policy Debate, Taylor & Francis Journals, vol. 30(4), pages 661-679, July.
    5. Helen X. H. Bao & Saul Shah, 2020. "The Impact of Home Sharing on Residential Real Estate Markets," JRFM, MDPI, vol. 13(8), pages 1-18, July.
    6. S.G. Sternik & G.V. Teleshev, 2018. "Impact of Banking Real Estate as an Asset Class on Financial System Stability: Monitoring, Forecasting, Management," Journal of Reviews on Global Economics, Lifescience Global, vol. 7, pages 851-864.
    7. Megan Nethercote, 2020. "Build-to-Rent and the financialization of rental housing: future research directions," Housing Studies, Taylor & Francis Journals, vol. 35(5), pages 839-874, May.
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    Cited by:

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