University of Technology Sydney

17772 Real Estate Economics

Warning: The information on this page is indicative. The subject outline for a particular session, location and mode of offering is the authoritative source of all information about the subject for that offering. Required texts, recommended texts and references in particular are likely to change. Students will be provided with a subject outline once they enrol in the subject.

Subject handbook information prior to 2024 is available in the Archives.

UTS: Design, Architecture and Building: School of the Built Environment
Credit points: 6 cp

Subject level:

Postgraduate

Result type: Grade and marks

Description

Real estate economics applies economic theory and analytical techniques to real estate markets in order to describe, explain and predict patterns of prices, supply and demand. The latest economic thinking and research are used to analyse real estate market fundamentals, forecasting of supply and demand, and investor behaviour. Students acquire an understanding of land economics and the economic principles and policies that affect real estate markets, as this subject introduces students to principles of economics applied to those markets. Relevant concepts from microeconomics, macroeconomics, behavioural economics, corporate finance and industry economics are covered. Macroeconomic policy and the relationship between property and business cycles, in both historical and international contexts, are covered in depth.

Subject learning objectives (SLOs)

On successful completion of this subject, students should be able to:

1. Understand the principles of economics and their application to real estate.
2. Apply concepts and approaches relevant to real estate from macroeconomics, microeconomics, transaction cost economics, behavioural economics and industry economics.
3. Ability to reflect and engage in self-critique and critical thinking

Course intended learning outcomes (CILOs)

This subject also contributes to the following Course Intended Learning Outcomes:

  • Effectively apply a variety of communication skills and technologies in professional contexts (C.1)
  • Work effectively in a professional team (C.2)
  • Apply a comprehensive understanding of contemporary portfolio theory in real estate investment (P.2)
  • Engage in an advanced level of critical and reflective thinking and judgement in property investment contexts (R.1)
  • Source, evaluate and use information within defined parameters (R.2)

Contribution to the development of graduate attributes

The term CAPRI is used for the five Design, Architecture and Building faculty graduate attribute categories where:

C = communication and groupwork

A = attitudes and values

P = practical and professional

R = research and critique

I = innovation and creativity.

Course intended learning outcomes (CILOs) are linked to these categories using codes (e.g. C-1, A-3, P-4, etc.).

Teaching and learning strategies

UTS has moved classes online for the semester and we have redesigned our subjects and assessments for remote learning. Real Estate Economics is structured and delivered through eight Modules in Canvas. The Program has the Module topics and required reading. The first Module is an introduction and explanation of the subject, then there are eight with recorded Powerpoint lectures on the Module’s topics.

We are basically substituting two Modules for a block day, replacing two hours of class lecture time with a lecture of narrated PowerPoint slides around 45 minutes and an hour or two of reading time. The reality of distance learning is self-directed study and more reading, You are expected to organize your own time over the semester. The subject can be done weekly over the semester allowing a couple of weeks for the assignments, or, if you are organizing around the block structure, done two modules at a time. You should allow two to four hours for each Module.

Modules have set readings and supplementary readings. Set readings for five Modules are from a free online economics textbook by CORE Economics called The Economy, used as the subject’s set text. You register and get access to their web page here http://www.core-econ.org/. This is a widely used introductory text and is suitable for students without any prior studies in economics. For students who have done some economics the examples and explanatory boxes will be useful. Modules also have supplementary reading, links for extended research and sources for further study. Library ebook and ddr links and pdfs for other set readings are provided.

The Introduction Module has a 30 minute recorded lecture on the subject content and assessment. Students are asked to watch that and introduce themselves to the class by posting a short 200 word biography on the Discussion board in Canvas at the beginning of semester.

Content (topics)

Principles of economics and the concepts of markets, demand, supply, and equilibrium

The role of government in fiscal and monetary policies

Land economics, urban economics and real estate markets

Real estate, financial markets and macroprudential regulation

Behavioural finance and investment

Assessment

Assessment task 1: Group data collection tasks

Intent:

This is a group exercise in data collection and analysis, using Australian regional and industry data. Each group has one state, like NSW, Queensland, Victoria or Western Australia to report on. The data comes from ABS publications. Individual task contributions are worth 20% and the industry recommendations 10%.

Objective(s):

This task addresses the following subject learning objectives:

1 and 3

This task also addresses the following course intended learning outcomes that are linked with a code to indicate one of the five CAPRI graduate attribute categories (e.g. C.1, A.3, P.4, etc.):

R.1 and R.2

Type: Exercises
Groupwork: Group, individually assessed
Weight: 30%
Criteria linkages:
Criteria Weight (%) SLOs CILOs
Data collection 50 1 R.2
Data analysis 50 3 R.1
SLOs: subject learning objectives
CILOs: course intended learning outcomes

Assessment task 2: Group report

Intent:

The second task is the group report from task one

Objective(s):

This task addresses the following subject learning objectives:

2 and 3

This task also addresses the following course intended learning outcomes that are linked with a code to indicate one of the five CAPRI graduate attribute categories (e.g. C.1, A.3, P.4, etc.):

C.1 and C.2

Type: Report
Groupwork: Group, group assessed
Weight: 10%
Criteria linkages:
Criteria Weight (%) SLOs CILOs
Contribute to the report 50 2 C.1
Demonstrate understanding of the data 50 3 C.2
SLOs: subject learning objectives
CILOs: course intended learning outcomes

Assessment task 3: Macroeconomics assignment

Intent:

The third task builds on the first two. The state reports from the groups provide a national analysis of patterns of growth and decline across Australian cities and industries. In an individual assignment of 2,000 words you are to combine this industry and location data with macroeconomic data like GDP, productivity and the exchange rate to make a recommendation on a significant investment in Australian manufacturing real estate for a global fund manager that specializes in those assets.

Objective(s):

This task addresses the following subject learning objectives:

1 and 2

This task also addresses the following course intended learning outcomes that are linked with a code to indicate one of the five CAPRI graduate attribute categories (e.g. C.1, A.3, P.4, etc.):

P.2 and R.1

Type: Report
Groupwork: Individual
Weight: 60%
Criteria linkages:
Criteria Weight (%) SLOs CILOs
Identify and discuss important factors 50 2 P.2
Demonstrate understanding of market dynamics 50 1 R.1
SLOs: subject learning objectives
CILOs: course intended learning outcomes

Minimum requirements

A mark of 50% is required to pass this subject.

Required texts

Set readings for five Modules are from a free online economics textbook by CORE Economics called The Economy, used as the subject’s set text. You register and get access to their web page here http://www.core-econ.org/. Modules also have supplementary reading, links for extended research and sources for further study. Library ebooks and ddr links and pdfs for other set readings are provided.

Recommended texts

Adeney, R. 2018. Structural change in the Australian economy, Reserve Bank of Australia Bulletin March 2018.

Baddeley, M. 2013. Behavioral Economics and Finance, Abingdon: Routledge.

Baddeley, M. 2016. Behavioural Economics: A Very Short Introduction, Oxford: Oxford University Press.

Baum, A and Hartzell, A. 2012. Global Property Investment: Strategies, Structures, Decisions, Wiley-Blackwell.

Brett, D.L. 2009. Real Estate Market Analysis: Methods and case studies, Washington: Urban Land Institute.

Cabral, L. 2017. Introduction to Industrial Organization, 2nd ed., MIT Press.

Chang, H-J. 2010. 23 Things They Don’t Tell You About Capitalism, London: Bloomsbury Press.

Damodaran, A. 2012. Investment Valuation, New York: Wiley.

de Valence, G. 2019. Reframing construction within the Built Environment Sector, Engineering, Construction and Architectural Management, 26 (5) 740-745.

DiPasquale, D. and Wheaton, W. C. 1996. Urban Economics and Real Estate Markets, Englewood Cliffs: Prentice Hall.

Fainstein, S. S. 2001. The City Builders: Property Development in New York and London, 1980-2000, Lawrence: Uni. of Kansas.

Glaeser, E. 2011. Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier and Happier, New York: Penguin.

Haldane, A. 2018. Ideas and Institutions: A growth story. Bank of England.

Kahneman, D. 2011, Thinking Fast and Slow, Allen-Lane Penguin.

Kindleberger, C.P. and Aliber, R.Z. 2017. Manias, Panics and Crashes: A History of Financial Crises, 7th ed., Basingstoke: Palgrave Macmillan.

Linklater, E. 2014. Owning the Earth: The Transforming History of Land Ownership, London: Bloomsbury.

McDonald, J. and McMillan, D. 2011. Urban Economics and Real Estate: Theory and Policy, Mason: South-Western.

McKinsey Global Institute, 2019. The Future of Work in America: People and places, today and tomorrow.

Miller, N.G. and Geltner, D.M. 2005. Real Estate Principles for the New Economy, Mason, South-Western.

O’Sullivan, A. 2012. Urban Economics, McGaw-Hill.

Rowland, 2012. Australian Property Investment and Financing, Pyrmont: Thompson Reuters.

Saunders, T. and Tulip, P.2019. A Model of the Australian Housing Market, Reserve Bank of Australia, Research Discussion Paper.

Schiller, R. 2005. Irrational Exuberance. Princeton: Princeton University Press.

Thaler, R. and Sunstein, C. 2008. Nudge: Improving Decisions about Health, Wealth and Happiness,

Another useful online resource is the Nobel Prize for Economics. Winners of the Prize whose work is discussed in the lectures each have a web page with a short overview of their work and significance (5 pages), and a longer, more technical review (40 pages). The list of prize winners is here https://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/.

References

Supplementary course materials will be posted to Canvas in the relevant Module.

Other resources

ABS 8155 Australian Industry 2018-19

ABS regional data https://itt.abs.gov.au/itt/r.jsp?databyregion

Bureau of Infrastructure Transport and Regional Economics

https://www.bitre.gov.au/national-cities-performance-framework#all_cities

The State of Australian Cities 2014–2015

https://www.infrastructure.gov.au/infrastructure/pab/soac/index.aspx