Economic Theory and Housing Market

The core of frugal theory is based on deliver and carry. Demand is
what consumers are willing to buy at individually given wrong. Supply is what
suppliers are willing to sell at a given price.

We can wherefore relate this to the caparison market.

on that point are factors, which can amplification or lessening supply, e.g. cost
and availability of resources, government tax etc.

There are also many factors that affect demand, e.g. price of
substitutes (flats), price of compliments (mortgage), etc. These
factors can then either increase of decrease demand.

THE HOUSING MARKET

I will character the housing market to try and prove if different economic
theories have elements of truth in it by looking at statistics and
facts, or is it simply theoretical and unrealistic.


THEORY ONE
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The frontmost economic theory states that if real household income rises
then demand for a good, thence houses should increase. Although
housing is seen more as a necessity, certain houses can also
definitely be seen as luxurious.





YEAR

NUMBER OF HOUSES BOUGHT (000S)

AVERAGE INCOME

1990

1400

11,184

1991

1300

12,103

1992

1128

12,824

1993

1191

13,405

1994

1279

13,863

1995

1311

15,636

1996

1243

16,519

1997

1440

17,713

1998

1347

19,057

1999

1470

19,641

2000

1499

Looking at the data we can nearly automatically see that the increase
in income has as a result increased the demand for purchasing houses due
to consumer confidence and spending. If they have more money then they
believe that they are able to spend more and therefore take out a
mortgage.

THEORY TWO

heed are two goods, which are bought in conjunction with each
other, as they are dependant on one another, e.g. flatulence and car.

A not so obvious compliment to buying a house, other than a mortgage
is stamp duty.

I will look at the amount stamp duty...If you compulsion to get a full essay, order it on our website: Orderessay



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