Wednesday, April 11, 2007

Demand and supply are responding to price

Britons Stay at Home Longer as House-Price Gains Outpace Pay

Demand: Britons are living with their parents for longer than they used to as gains in house prices make it less affordable for them to buy a place of their own, a report shows. Supply: more intensive building, today's report showed. The number of new dwellings per hectare in the capital rose to 110 from 48, while the average for the country was an increase to 40 dwellings from 24... More new properties in England are being built on already- developed land... new homes are getting smaller. Forty-two percent of new homes built have two bedrooms, while 25 percent have four or more bedrooms

Posted by confused76 @ 09:15 AM (774 views)
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3 thoughts on “Demand and supply are responding to price

  • European Bear says:

    Don’t despair! Did anyone see Gary MacCausland on Five Life yesterday? It was excellent. According to Gazza, the Liverpool property market has crashed. Prices have recently fallen by up to 70%. A couple of hapless property developers on the show lost £33K on a property at auction. But don’t property prices always go up? No, HPC coming to a town near you, soon. ‘Ye cannae change the laws of economics Captain’

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  • Prices is the result of supply and demand, not the other way around.

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  • Alfred,
    what you say is valid only short-term. Longer term, price (and therefore profit opportunity) can shift the supply curve (eg developers build scores of cheaper one bedroom flats on reclaimed industrial land). At the same time price (through affordability and lifestyle trade-offs) moves the demand curve… I may decide I can commute a bit longer, pay less for my house and still have money for my skiing holiday. So, indeed, price has an impact on supply and demand.

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