Government Real Estate Interventions and the Stock Market

61 Pages Posted: 28 Apr 2020 Last revised: 24 Feb 2021

See all articles by Amir Akbari

Amir Akbari

Ontario Tech. University

Karolina Krystyniak

Ontario Tech University

Date Written: April 4, 2020

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.

Keywords: Government Externality, Real Estate, Institutional Investors

JEL Classification: G23, G14, G18

Suggested Citation

Akbari, Amir and Krystyniak, Karolina, Government Real Estate Interventions and the Stock Market (April 4, 2020). International Review of Financial Analysis, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3568770 or http://dx.doi.org/10.2139/ssrn.3568770

Amir Akbari (Contact Author)

Ontario Tech. University ( email )

2000 Simcoe Street North
Oshawa, Ontario L1H 7K4
Canada

HOME PAGE: http://www.amir-akbari.com

Karolina Krystyniak

Ontario Tech University ( email )

2000 Simcoe Street North
Oshawa, Ontario L1H 7K4
Canada

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