Course Outline 2016

PROPERTY 261: PROPERTY ECONOMICS (15 POINTS)

Semester 2 (1165)
Course Prescription

The supply and demand characteristics of urban developments have impacts on not only
the price and availability of property, but on how we live and work. An understanding of
development economics, urban policy and land-use economics will provide students with
knowledge of how the decisions of property professionals, policy makers, and occupiers
interact to shape the built environment.

Programme and Course Advice

Prerequisite: PROPERTY 102 OR ECON 101 or 191

The course is designed for students that have elementary knowledge of microeconomics
and a cursory knowledge of the macro economy (i.e. indicators like GDP used to describe
economies). While this course favours diagrammatic/conceptual models over
mathematical/statistical models, the latter are unavoidable when it comes to applying
property economics in the practice of market analysis. In this regard, mathematical
models will be constrained to basic algebraic and statistical techniques. Knowledge of
differential calculus is not required.

Goals of the Course

This course provides students with an introduction to key conceptual models of urban
land-use and property development economics, including examples of their application in
a market analysis context. Key property sectors are examined (Industrial, Commercial,
and Residential) using local and international examples.

Learning Outcomes

By the end of this course it is expected that the student will be able to:
1.
2.
3.
4.
5.
6.

Critically apply urban economic theory to property issues using written

communication;
Apply economic theory to a wide range of property contexts, including
development, urban renewal, sustainability, and public policy;
Outline and critically evaluate residential, industrial, and retail location theories;
Account for housing tenure dynamics (home ownership) both nationally and
internationally;
Evaluate the role of government and public policy in urban property markets; and
Apply urban economic models in an elementary market analysis context.

Learning and Teaching

The anticipated class size should not exceed 120 students. The class will meet for three
hours each week. Class time will be used for a combination of lectures and applied
discussions. In addition to attending classes, students should be prepared to spend about
another six hours per week on activities related to this course. These activities include
carrying out the required readings and preparing for assignments and the final exam.

Teaching Staff

Dr. Jeremy Gabe

Lecturer in Property
Office: OGGB Room 532
Tel: 373-7599 (ext 84482)
Email: j.gabe@auckland.ac.nz
Office hours: Tuesday 2-4pm

Content Outline

This course begins with theoretical models of urban land economics, transitions into their
application to particular real estate contexts, and concludes with an introduction to the
practical application of urban economics in a real estate market analysis context.
The following table is a general outline of the topics covered each week, and is subject to
change as the course progresses. Any changes will be notified on Canvas.
Week
1
2
3
4
5
6

7
8
9
10
11
12

Week
Beginning
18 July

Topic

Tue: Property Processes and the City: An Introduction

Wed: Supply and Demand Models for Property Space and Assets
25 July
Tue: Urban Land Use: von Thunen and Alonso
Wed: Bid-Rent Theory, Monocentric City, Dynamic Cities
1 Aug
Tue: The Economics of Property Development
Wed: Property Redevelopment and Rehabilitation
8 Aug
Tue: Homeownership and Housing Finance
Wed: Assignment Introduction and Preparation (work session).
Details TBA.
15 Aug
Tue: Assignment Workshop I
Wed: Assignment Workshops II and III
22 Aug
Tue: Industrial Location I
Wed: Industrial Location II
Mid-Semester Break 29 August through 10 September
12 Sep
Tue: Retail Location I
Wed: Retail Location II
19 Sep
**ASSIGNMENT DUE Monday 19 September @ 10 AM**
Tue: Planning Economics I: The Economic Rationale
Wed: Planning Economics II: The Changing Nature of Planning
26 Sep
Tue: State Housing
Wed: Externalities: The Environment, Poverty and Renewal
3 Oct
Tue: From Theory to Practice: Property Market Analysis
Wed: Demand & Supply Analysis
10 Oct
Tue: Data for Property Market Analysis I
Wed: Data for Property Market Analysis II
17 Oct
Tue: Course Review
Wed: Property Market Analysis Case Study

Learning Resources

There is no one textbook that covers the entire content of this course.
Recommended texts, many of which are cited in the course material, are:
Balchin, P., Isaac, D. and Chen, J. (2000) Urban Economics: A Global Perspective,
Palgrave, Basingstoke (UK).
Brett, D.L. and Schmitz, A. (2009) Real Estate Market Analysis: Methods and case
studies, Urban Land Institute, Washington D.C. (Very U.S.-centric, but provides helpful
examples of market analysis in practice)

Geltner, D.M., Miller, N.G., Clayton, J. and Eichholtz, P. (2014) Commercial Real Estate:
Analysis and Investments. Oncourse Learning, Mason, OH (USA), pp. 1-121. (This a text
predominantly dedicated to property investment and finance, but the first 6 chapters
cover urban economic theory and property market analysis)
Harvey, J. and Jowsey, E. (2003) Urban Land Economics Palgrave, Basingstoke. (Earlier
editions by Harvey cover similar material as does latest edition by Jowsey, E. (2013) Real
Estate Economics, Palgrave.)
OSullivan, A. (2009) Urban Economics, McGraw-Hill.
Pirounakis, N. (2013) Real Estate Economics: A point-to-point handbook, Routledge,
London. (This book provides a mathematical analysis of several of the topics covered in
this course and should be viewed as an additional, rather than core, reference).

Assessment

Individual Assignment: Essay

Final Exam (2 hours, covering the entire course)
Total

40%
60%
____
100%

Further details on the assessments will be provided at our first lecture.

The broad relationship between these assessments and the course learning outcomes is
as follows:
Due
Date
19th Sep
(10 am)

Type

Assignment

Weighting

Learning
Outcomes
Addressed

40%

1,4,5

60%

1,2,3,4,5,6

Essay (1,500 words)

(Details of assignment will be
given in class)
Exam

(Note: The details set out in this handout are subject to change. Any changes will be
notified in lectures and on Canvas)

Inclusive Learning

Students are urged to discuss privately any impairment-related requirements face-toface and/or in written form with the lecturer.

Student Feedback

This course has been running for a number of years and is well received by students with
the majority of students positively commenting on the course content and the logical
structure of the lectures. This year, a new Lecturer (Dr. Jeremy Gabe) takes the course
and will run it in a largely similar fashion. The main difference is the substitution of two
weeks on welfare economics with an introductory treatment of property market analysis
techniques. This change better prepares students headed for the property industry with
an understanding of the practical application of property economics.
In the past, students have found the course essay demanding, so Weeks 4 and 5 largely
consist of topic-related to content and writing workshops. One of the skills currently at
the top of property employers wish lists is written communication and while students
have already developed essay writing skills at school, this course includes guidance on
professional writing strategy and techniques.

In the Event of an Unexpected Disruption

We undertake to maintain the continuity and standard of teaching and learning in all your
courses throughout the year. If there are unexpected disruptions the University has
contingency plans to ensure that access to your course continues and your assessment is
fair, and not compromised. Some adjustments may need to be made in emergencies. In
the event of a disruption, the University and your course coordinators will make every
effort to provide you with up to date information via canvas and the university web site.