In most cases however the supply of the houses and the properties in any region is relatively price inelastic. This is because of the in practical situations for property based transactions; there exist time lags between the changes taking place in the market. Moreover there is also a considerable time lag for the supply and demand side for the market to respond as it takes people time to shift into as well as to shift out of houses and properties.
The aggregate demand in the housing sector for the UK region is based on multiple factors. These functions lead to the demand function. The growth of real incomes leads to the demand function as the growth in comes triggers desires for better homes and better living standards. Similarly the consumer confidence in the housing sector also helps is securing the future of the market resulting in a strong demand. Aside from the rise in employment and the securing of more values jobs by people in a region leads to a higher demand for property as well. Additionally the future price movements as well as the housing taxes and government policies of subsidies also affect the demand function. The government policies which can affect demand include income tax policies, unemployment benefits as well as mortgage facilities and the interest rate provided on government bonds, and the treasury etc.
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