Lecture 1 - Introduction to Real Estate Economics
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Transcript of Lecture 1 - Introduction to Real Estate Economics
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8/7/2019 Lecture 1 - Introduction to Real Estate Economics
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INTRODUCTION TO REALESTATE ECONOMIC
By:
Ma sni binti Salleh
No. Bilik: B208-02Tel: 07-453 8152 / 019-7205105
ma [email protected] du.my
BPE 3393BPE 3393
ECONOMIC FORECONOMIC FOR REAL ESTATEREAL ESTATESEM 1, 2009/2010SEM 1, 2009/2010
LECTURE 1:LECTURE 1:
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CONTENT
(a) What is real estate?
(b) What is real estate economics?
(c) Why study real estate economics?
(d) What is urban economics?
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1.0 WHAT IS REAL ESTATE
Real estate is defined as a land
The ownership of real estatecarries certain rights, known
as the bundle of rights -
includes the right to use,
possess, exclude and dispose
The rights are not absolute -they can be legally modified
by private restrictions and
government regulations and
laws
In short, real estate or realproperty is land and
improvements and the rights
associated with the ownership
of same
What is Real
Estate ?
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2.0 WHAT IS REAL ESTATE ECONOMICS
Real estate economics is about people and how their actionsaffect real estate values.
A formal definition - real estate economics is a study that useseconomic principles, both macro and micro, to analyze theimpact that national, regional, community and neighborhood
trends have on real estate values.
Focuses on the economic principles that affect real estatevalues.
Real estate economics is neither the study of generaleconomics nor a course in the practice of real estate.
Rather, real estate economics is the link between generaleconomic theory and applied real estate practice. 4
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A course in general economics concentrates on how society
attempts to use limited resources to satisfy the wants of its
people. However, such course does not examine how this,
affects local real estate market.
A course in real estate practice concentrates on the specifictechniques needed to complete a real estate transaction butspends little time discussing the economic influences that
determine whether a home purchase or other real estateinvestment will be profitable over the years.
Real estate economics draws principles from both generaleconomics and real estate practice and then combines themin order to study changes in real estate activity.
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The main thrust of real estate economics is to help real estatestudents anticipate future trends and what impact thesetrends will have on local real estate values.
Refer to Figure 1 and Figure 2.
Figure 1: The field of real estate economics draws principlesfrom both general economics and real estate practice.
General Economics
Principles
and Theory
Real Estate
Principles
and Practice
REAL ESTATE
ECONOMICS
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Figure 2: House of real estate economic
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3.0 WHY STUDY REAL ESTATE
ECONOMICS
Real estate economics help people to understand what causesfluctuation in real estate activity and how these changes canaffect local real estate markets.
Investors and licensed agents make real estate decisions thatinfluence the shape, form and value of property in a givencommunity.
Real estate decisions made today will be reflected in realestate values in the cities and neighborhoods of tomorrow.
A course in real estate economics aids people inunderstanding what impact todays real estate actions willhave on future real estate values.
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1) Market forces in the development of citiesThe interurban location decisions of firms and householdsgenerate cities of different size and economic structure.
2) Land use within cities
The intraurban location decisions of firms and householdsgenerate urban land-use patterns.
3) Urban transportationPossible solutions to the urban congestion problem andlook at the role of alternative urban transportationsproblem.
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4. Urban crime and public policy
Problem of urban crime are linked with two other urbanissues, poverty and low educational achievement.
5. Housing and public policyHousing choices are linked to location choices becausehousing is immobile.
6. Local government expenditures and taxes
In making location choices, households consider the mix oftaxes and local public goods.
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Class Activity
Real estate studies at universities are
biased towards urban problem.
Argue !
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THANK YOUTHANK YOUJuly, 2009
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