Piyush Tiwari is Associate Professor of Property, Faculty of Architecture, Building and Planning, University of MelbourneMichael White is Professor of Real Estate Economics, School of Architecture, Design and the Built Environment, Nottingham Trent University

• Preface xiAcknowledgements xiii1 International Economic Developments since the 1970s 1Introduction 1International trade theories: Setting the scene 2International goods and capital flows 3Theoretical models of trade 7The Dunning eclectic paradigm 19Porter’s model of competitive advantage of nations 24Trading blocs and globalisation 27Conclusions 28Notes 28References 282 International Real Estate Markets: Evolution 31Introduction 31Size of property market 33User market 35Investment market 42Investor profile 48Development 50Financing of property 52International real estate activity and trade models 55Conclusions 59Note 60References 603 Financial Systems, Flow of Funds to Property and Innovations 63Introduction 63Bank-based and market-based financial systems 64Property investors and intermediaries 67Investment mechanisms 68Innovations 74Economic assessment of investment mechanisms 76Impact of new investment mechanisms on business culture and practices 81Conclusions 82References 834 Property Investors, Investment Vehicles and Strategies 85Size of property 85Investment and investors 86Property in investment portfolio 92Investment strategies 98Property investment and leverage 101Conclusions 103Appendix 4.1 104References 1075 Financial Markets, the New Economy and the Risk 109Introduction 109Value determinants of real estate in the twenty-first century 112Theorising real estate linkages in the new economy 116Financing of real estate in new economy 119Leverage and risks 123Conclusions 126References 1266 Real Estate Asset Bubbles 129An introduction to cycles in real estate 129Expectations and bubbles 136Formation of real estate bubbles and its detection 139Key patterns of past real estate bubbles 140Explanations in the literature, new economy and role of credit 149Conclusions 152References 1527 International Capital Flows in Property: Portfolio Diversification or Return Chasing 155Introduction 155Theoretical considerations in portfolio investment 159Direct property in multi-asset portfolios 162Direct property in property-only portfolios 164Indirect property investment in multi-asset portfolios 165Indirect real estate investment in real estate-only portfolios 166Contradictions in research on diversification benefits from international property investment 167Capital flows and property returns 168Conclusions 170References 1708 International Financial Innovation, Real Estate and the Macroeconomy 175Introduction 175Real estate and macroeconomic interactions: Cycles and trends 175Market cycles, risk and regional offices 187Bubbles in asset markets 209Risk management 210Observations and conclusions 212Notes 214References 2149 International Financial Innovation and Real Estate Market Performance 219Introduction 219Mortgage product development 219Why use debt? 220Risk analysis 222Variable risk 223The secondary mortgage market 224Institutions and market performance 228Cycles in real estate and the availability of finance 233Conclusions 235References 23710 Real Estate in the New Economy 239Introduction 239The new economy and world economic structure 240Real estate in the new economy 252Overview and conclusions 255Note 258References 259Index 261

Piyush Tiwari is Associate Professor of Property, Faculty of Architecture, Building and Planning, University of MelbourneMichael White is Professor of Real Estate Economics, School of Architecture, Design and the Built Environment, Nottingham Trent University

• Preface xiAcknowledgements xiii1 International Economic Developments since the 1970s 1Introduction 1International trade theories: Setting the scene 2International goods and capital flows 3Theoretical models of trade 7The Dunning eclectic paradigm 19Porter’s model of competitive advantage of nations 24Trading blocs and globalisation 27Conclusions 28Notes 28References 282 International Real Estate Markets: Evolution 31Introduction 31Size of property market 33User market 35Investment market 42Investor profile 48Development 50Financing of property 52International real estate activity and trade models 55Conclusions 59Note 60References 603 Financial Systems, Flow of Funds to Property and Innovations 63Introduction 63Bank-based and market-based financial systems 64Property investors and intermediaries 67Investment mechanisms 68Innovations 74Economic assessment of investment mechanisms 76Impact of new investment mechanisms on business culture and practices 81Conclusions 82References 834 Property Investors, Investment Vehicles and Strategies 85Size of property 85Investment and investors 86Property in investment portfolio 92Investment strategies 98Property investment and leverage 101Conclusions 103Appendix 4.1 104References 1075 Financial Markets, the New Economy and the Risk 109Introduction 109Value determinants of real estate in the twenty-first century 112Theorising real estate linkages in the new economy 116Financing of real estate in new economy 119Leverage and risks 123Conclusions 126References 1266 Real Estate Asset Bubbles 129An introduction to cycles in real estate 129Expectations and bubbles 136Formation of real estate bubbles and its detection 139Key patterns of past real estate bubbles 140Explanations in the literature, new economy and role of credit 149Conclusions 152References 1527 International Capital Flows in Property: Portfolio Diversification or Return Chasing 155Introduction 155Theoretical considerations in portfolio investment 159Direct property in multi-asset portfolios 162Direct property in property-only portfolios 164Indirect property investment in multi-asset portfolios 165Indirect real estate investment in real estate-only portfolios 166Contradictions in research on diversification benefits from international property investment 167Capital flows and property returns 168Conclusions 170References 1708 International Financial Innovation, Real Estate and the Macroeconomy 175Introduction 175Real estate and macroeconomic interactions: Cycles and trends 175Market cycles, risk and regional offices 187Bubbles in asset markets 209Risk management 210Observations and conclusions 212Notes 214References 2149 International Financial Innovation and Real Estate Market Performance 219Introduction 219Mortgage product development 219Why use debt? 220Risk analysis 222Variable risk 223The secondary mortgage market 224Institutions and market performance 228Cycles in real estate and the availability of finance 233Conclusions 235References 23710 Real Estate in the New Economy 239Introduction 239The new economy and world economic structure 240Real estate in the new economy 252Overview and conclusions 255Note 258References 259Index 261