Monday, August 11, 2014

Real estate: Conundrum of property rights and economic growth

I have recently been working on understanding real estate investments, mostly commercial.  It is rather fascinating that I only come to one conclusion; real estate investments over a period of time, in a particular growing region will form a bubble, collapse, and start again.  And that the minority incumbents in a free market system do not come out as winners either.

To validate some of my learning, here is a good analysis on real estate from the Economist:

"There is a strong correlation between economic growth and secure property rights for foreign and elite investors. But when Ms Lawson-Remer looked for a relationship between property security for minority groups and economic growth, she could find none. Nor was there any correlation between property security and a country’s ranking on the UN Development Programme’s Human Development Index. Securing the property rights of minorities seems to have no clear consequences for economic growth."

Read the complete article here.

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