Welcome to the hotseat. We've prepared a guide if you'd like to read more about how it works.

Test 4 2015 Question 8

0 votes
26 views
asked Nov 2, 2016 in BUS 1003H - Introduction to Financial Risk by borisk15 (330 points)

List 4 reasons why property is marketable.

1 Answer

0 votes
answered Nov 2, 2016 by borisk15 (330 points)
selected Mar 1 by Rowan
 
Best answer
  • Property usually has large unit sizes - this means that each unit of property purchased is a costly investment, which may be unaffordable for some investors; because of this, there are fewer investors who would actively trade (buy or sell) properties. Therefore, the market for properties is not very active. This makes it difficult to market properties.
  • Property is usually unique, since the developers of the properties developed them with a specific goal, taking into account a specific set of parameters. This uniqueness means that it is difficult to find people who are willing and able to purchase any one property. This therefore makes it unmarketable.
  • Valuation is much more difficult due to the fact that property are infrequently traded - the property market is not very active, as pointed out above.
  • Property is not listed on exchanges - this again reduces the marketability of property since there is no financial market for it.
  • Furthermore, the buying process of property is usually very long and difficult - due to legal requirements - and this makes it less marketable as well.
...