Introduction to Property Market

Definition of property in economics.

• Anything that is owned by a person or entity.

• Any interest in land, real estate, growing plants - immovable.

• Sometimes called "personalty" or "chattel" which is everthing else - movable.

• The action or process of investing money for profit.

"Real property" excludes...

• Land

• Real estate

• Movable

• Growing plants

"Personal Property" excludes...

• Personalty

• Chattel

• Stocks and bonds

• Immovable

The following are characteristics of "Real Property" excepts...

• Very expensive and difficult to create additional land.

• No physical substance e.g. copyrights, trademark, patents, goodwill.

• Different in size, topography, locality and condition.

• Naturally limited in supply.

What is "investment"?

• The action of taking money out an account.

• The action of spending money, especially excessive amounts of money.

• The action of saving money, especially through a bank or official scheme.

• The action or process of investing money for profit.

The followings describe "investing" excepts...

• Acieve major goals - long term.

• Ready access to cash.

• Potential for profit.

• Always involve risk.

The followings describe "Saving" except...

• Harder to access cash.

• Ready to go - short term.

• Minimal risk.

• Earn interest.

What is "Property Investment"?

• Use money to buy property intended for sale in the near term.

• Use money to buy property for holding for future resale potential or leasing or rent for income.

• Use money to buy property for owner-occupied property.

• Use money to buy property leased to a third party under a finance lease.

The followings are advantages of "Property Investment" except...

• Changes in new design and technology may affect property value.

• Very expensive but secure, fairly low risk, difficult to lose everything.

• Pride of ownership/personal satisfaction.

• Value may increase due to spillover effect.

The followings are method used in "Property Valuation" by property valuer except...

• Expenditure Approach

• Contractor Basis

• Cost Method

• Discounted Cash Flow