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Let's look at that assertion with an example. Say there are two areas, A, providing a 10% rental yield and B, providing a 5% rental yield. If both had expected capital gains of 5%, which one do you think buyers would target? The arbitrage actions of buyers support this relationship over the...

Yes, but it's not straightforward. Over the long term the total returns from real estate are around 10% p.a. (capital gains + rental yield). So if the rental yield is say 4%, then expected capital gains are around 6%. However, in the short term if there was a lot of demand for real...