Evolving Challenges for Sustainable Growth
Edited by Roberta Capello and Tomaz Ponce Dentinho
Chapter 7: Methods and models of analysis in the urban housing market
In modern economies the housing market and related industrial sectors play important roles in regional and national economic growth – when major changes take place in these markets they often have impacts on other sectors and consequently on the welfare of the population. The impacts of the housing market are visible both at the macro and micro levels in three distinct areas of the economy: (i) in the production system, (ii) in household expenditure, and (iii) in urban and regional planning. In the production system, the housing sector has significant multiplier effects on employment, output and investment, resulting from its relationship to a vast commodity chain. The housing market is a major element in the composition of national income in modern economies. For example, in the United States, housing construction and related services represented about 14 per cent of GDP in 2001 (US Bureau of Labor Statistics, 2001); in Portugal, housing investment accounted for 18 per cent of gross fixed capital formation in 2003 and equivalent figures for Spain and the European Union were 29 and 25 per cent, respectively (Eurostat – Statistical Office of the European Union). In household expenditure, the residence represents the most valuable single asset owned by most individuals, and a very large share of household wealth. The share of income spent on housing represents a very large fraction of total expenditure and a permanent source of direct expenses (rent, interest rate and amortization, repair and restoration, and so on) and indirect costs (energy, water, telecommunications, furniture and other domestic goods, and so on).
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