True or False: A Q ratio greater than one indicates that existing properties are expensive relative to their replacement cost.

A Q ratio greater than one indicates that existing properties are indeed expensive relative to their replacement cost. When the Q ratio is above one, it signifies that the market value of the existing properties exceeds the cost of constructing new properties. This can suggest investor confidence in the current properties, leading to higher prices due to demand surpassing supply.

Conversely, a Q ratio below one would indicate that it is cheaper to build new properties than to purchase existing ones, which may suggest that the market is undervalued or that properties are less in demand.

So, the notion that a Q ratio greater than one indicates expensive existing properties is fundamentally accurate. Therefore, stating that the proposition is false would not align with the financial underlying principles of the Q ratio in real estate economics.