This Lesson is divided into nine topics.
The housing market in Australia is vitally important, not only because it provides us with the basic need of shelter but also because it provides a storehouse of household and national wealth, is an appreciating asset and construction plays a pivotal role in the health of the economy.
According to Core Logic’s latest Quarterly Review, Australian Residential Real Estate is valued at approximately $7.5 trillion and Commercial Real Estate at $0.964 trillion.
The housing market operates within the wider context of the economy. It is influenced by supply and demand, government policy, the level of employment, interest rates, inflation, demographics such as migration and birth rates, red tape and bureaucracy, psychology and the media to name just a few factors.
In turn, the housing market influences and provides momentum to jobs growth, consumption and tax revenues.
It is a vitally important sector and ‘housing starts’ are a leading economic indicator that policy makers watch closely. It is therefore important to have an understanding of this context.
Via the multiplier effect, housing construction increases demand not only for bricks and mortar but all the additional consumer goods that go with a home – all the complementary goods and services.
This lesson will build upon the basic issue, that “we can’t have it all”! Economists define scarcity as the dilemma that wants always exceed resources.
We are forced to make choices, as a nation and as individuals. We have to decide if we want to live purely for now or whether we are prepared to delay some gratification and build wealth for the future.
It’s a balancing act that involves trade offs but ultimately it’s an attitude we adopt, a decision we make, and a plan we implement.