Corporate Equity and Commercial Property Market 'Bubbles'

Patric Henry Hendershott, R. Hendershott, C. Ward

    Research output: Contribution to journalArticle

    12 Citations (Scopus)

    Abstract

    Periodic sharp sustained increases and then reversals in asset prices lead many to posit irrational price 'bubbles'. The general case for bubbles is that asset prices simply move too much given the future cash flows the assets are reasonably likely to produce. A corollary for property is that observed mean reversion in real cash flows is not reflected in investor valuations, resulting in asset values being too high when real cash flows are high and vice versa. This paper summarises some evidence on large corporate equity and commercial property price movements and present arguments for and against the existence of irrational bubbles.

    Original languageEnglish
    Pages (from-to)993-1009
    Number of pages16
    JournalUrban Studies
    Volume40
    Issue number5-6
    DOIs
    Publication statusPublished - 2003

    Keywords

    • VARIANCE BOUNDS TESTS
    • SYDNEY OFFICE MARKET
    • STOCK-MARKET
    • VALUATION
    • PRICES

    Cite this

    Hendershott, P. H., Hendershott, R., & Ward, C. (2003). Corporate Equity and Commercial Property Market 'Bubbles'. Urban Studies, 40(5-6), 993-1009. https://doi.org/10.1080/0042098032000074281