Assessing the Investment Attractiveness of Residential Real Estate in Europe and Asia

Residential real estate has a dual nature – it serves as a basic commodity for satisfying the needs of the population and simultaneously as a tool for preserving and increasing capital. The objective of this study is to test and develop a relative indicator of investment risk in national residential real estate markets, reflecting the investment attractiveness of purchasing a property. The methodological basis consists of a comparative analysis and descriptive statistics methods based on data from European and Asian countries for 2014-2023. The relevance of the article is due to the systematization of risks in various types of international financial and economic communications in the residential real estate market. The novelty of the study lies in the development of a relative risk indicator that combines the level of housing prices, incomes, and the stability of this ratio over time. This allows us to identify national markets with different combinations of housing affordability and dynamic instability and more effectively make decisions regarding long-term investments in residential real estate. It was found that the lowest risks of investing in residential real estate are typical for the Scandinavian countries, the Baltic countries, and the United Kingdom. For the Russian Federation, the risk level is comparable to the countries of Eastern Europe. In Asian countries, the highest risk indicators are typical for South Korea, the Philippines, Vietnam, and Georgia, and the lowest for Jordan, Qatar, Saudi Arabia, and the UAE. The results obtained can be used as a preliminary element in the selection of investment-attractive residential real estate markets when formulating an investment strategy.