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Market Efficiency and Rationality in Property Investment

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Abstract

This article applies the present-value model to investigate property market efficiency in the United Kingdom. The existence of “rational bubbles” in the U.K. property market is ruled out at conventional statistical significance levels, though the U.K. property market appears not efficient. In addition, there are variations among the office, retail, and industrial property markets. The rejection of the present-value model implies a price discovery mechanism may exist for property investment.

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Authors and Affiliations

  1. Manchester School of Management, University of Manchester Institute of Science and Technology, Manchester, M60 1QD, United Kingdom

    Peijie Wang

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  1. Peijie Wang
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Wang, P. Market Efficiency and Rationality in Property Investment. The Journal of Real Estate Finance and Economics 21, 185–201 (2000). https://doi.org/10.1023/A:1007855116866

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  • DOI: https://doi.org/10.1023/A:1007855116866

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