A comparative framework for commercial and residential markets

In the analysis of property markets, most research focuses on either the commercial or the housing sector. Each body of literature has developed its own ‘stylized facts’ about ‘normal’ values of property such as income yields and price elasticities of supply, around which cyclical models have been built. However, what is treated as normal in one sector may appear as unusual and requiring special explanation when viewed from the perspectives of another. This paper reviews the recent literature on property cycles to compare the status of research in residential and commercial sectors; and provides an organized framework for comparison. The output of this research is a new comparative framework for systematic analysis of regulatory challenges and business decision making for housing and commercial markets. This will encourage greater reflection and comparative analysis of the changing property economic environment. Finally, this paper aims to contribute to the literature by seeking to develop a better understanding of property markets.