Cycles and steps in British commercial property values

Scott, P. ORCID: https://orcid.org/0000-0003-1230-9040 and Judge, G. (2000) Cycles and steps in British commercial property values. Applied Economics, 32 (10). pp. 1287-1297. ISSN 1466-4283 doi: 10.1080/000368400404443

Abstract/Summary

This paper examines cyclical behaviour in commercial property values over the period 1956 to 1996, using a structural times series (unobserved components) approach. The influence of the transition to short rent reviews during the late 1960s and the short and long-term impacts of the 1974 and 1990 property crashes are also incorporated into the analysis, via dummy variables. It is found that once these variables are taken into account a fairly regular cyclical pattern can be discerned, with a period of about 7.8 years. Furthermore, the 1974 and 1990 property crashes are shown to have had a major long-term impact on property value growth (presumably via their influence on investors' expectations).