INTERNATIONAL ARTICLES: DO REAL ESTATE STOCKS HEDGE INFLATION IN THE LONG RUN? EVIDENCE FROM THREE EAST ASIAN EMERGING MARKETS

Abstract

Unsecuritized real estate is often hailed for its inflation-hedging quality. Do real estate stocks exhibit this desirable inflation-hedging characteristic in the long run? Existing studies mainly focus on American real estate investment trusts (U.S. REITs) and British real estate stocks. Extending these studies, this paper explores the long-run, inflation-hedging properties of real estate stocks in Malaysia, the Philippines, and Taiwan. Contrary to results based on data from developed markets, the empirical evidence in this study clearly shows that real estate stocks do not provide a hedge against inflation in the long run in the three East Asian emerging markets in this study.