Real estate investments as a potential hedge against inflation

Abstract

The study seeks to examine how real estate, mainly residential, can act as a shield against inflation. The main objectives include identifying the qualities of residential properties that help them maintain value and generate returns during inflation, as well as analysing historical data to see how real estate has performed in past inflationary periods. The research will also look into key factors affecting real estate values during inflation, such as interest rates and market conditions. Additionally, it will explore how changes in market and economic conditions influences the behaviour of investors and their decisions related to real estate investments. Two main sections can be highlighted: a thorough review of academic articles and market reports to build a theoretical context, and second, an empirical analysis of historical data on real estate prices, rental yields, and economic indicators. Statistical techniques could also be used to find patterns and trends that demonstrate real estate's effectiveness as a hedge against inflation. By conducting this study, I aim to provide a clearer understanding of how real estate investments perform during inflationary times and prove whether they are efficient in acting as a hedge against inflation.