USB142 Fundamentals of Property Valuation - Week 1: Property and Economy

Comprehensive practice flashcards covering vocabulary and key concepts from the first week of USB142 Fundamentals of Property Valuation.

Economics (Robbins 1998)

The science that studies human behaviour as a relationship between ends and scarce means, which have alternative uses.

Property economics

A branch of economics concerned with how demographic profiles, perceptions of risk, time preferences, and community sentiment influence the behaviours of buyers and sellers.

Maslow’s hierarchy of needs

A motivational theory in psychology comprising a five-tier model of human needs often depicted within a pyramid, where behaviours are motivated by multiple needs simultaneously.

Microeconomics (Property context)

The study of how individuals, households, firms, and markets make decisions regarding the allocation of scarce resources and how they are influenced by priorities and income.

Macroeconomics (Property context)

The study of aggregates of the economy, including links between government, industry sectors, and variables like national income, output, cash rate, interest rates, employment, and inflation.

Land (Economic Theory definition)

Includes buildings and other related fixed improvements.

Heterogeneous commodity

An economic characteristic of property where assets differ from each other to a greater or lesser extent rather than being identical.

Highest and best use

The highest potential of a property reached through the investment of capital and other factors of production.

Long supply lags

Time delays in recognition and production when bringing property assets into usable form, often creating short-term price spikes.

Expansion (Economic Cycle)

A phase marked by an increase in production/output, a decrease in unemployment, and an increase in wages and consumer spending.

Contraction (Economic Cycle)

A phase marked by a decrease in production/output, an increase in unemployment, and a decrease in wages and consumer spending.

Total value of dwelling stock (ABS 2026)

$12,772.6\,\text{billion}$.

Total number of residential dwellings (ABS 2026)

$11,495,200$.

Mean price of residential dwellings (ABS 2026)

$1,111,100$.

Physical Characteristics - Land

Elements including shape, size, topography, views, exposure (sunlight, wind), soil quality, and bearing capacity.

Improvements TO the land

Physical changes such as drainage, filling, trace elements, clearing, and levelling.

Improvements ON the land

Physical attachments such as structures and fencing designed for optimal improvement or highest and best use.

Tenure System Powers

Powers of ownership including the rights to use, alienate (transfer ownership), assimilate, pass by succession, and claim title.

Immobility

An economic characteristic resulting in a localised market, long transaction times, and the inability to avoid externalities because income is derived from a fixed location.

Large Economic Units

A characteristic of property requiring large amounts of capital and special financing techniques to own.

Durability

The quality of land being virtually indestructible and structures having a long life, though they may be economically 'destroyed' through obsolescence.

Scarcity (Economic)

The concept that land use cannot be sustained beyond its extensive margin, creating competition for uses despite physical supply.

Direct participants (Property Market)

Stakeholders including property developers, investors, real estate agents, valuers, property managers, facility managers, asset managers, owners, and researchers.

Indirect participants (Property Market)

Stakeholders including financiers/banks, solicitors, town planners, builders, government, architects, tenants, and service providers.

Property Life Cycle

The five stages of an asset: Planning, Acquisition, Utilisation, Asset Management, and Dispose/Redevelop.