Peddling market myths!


More today from ‘Going West…’

Peddling market myths
A further questionable assumption that often lies behind analyses of the housing market and its relationship to new dwellings is that supply responds solely to demand. In reality, markets are places where supply interacts with demand. Demand is not the invariably independent variable and supply always the dependent variable. Supply can and does create its own demand. The marketing strategies of the volume house builders and estate agents active in Cornwall make this patently obvious.

Adverts for housing that include text such as the following are not aimed at a Cornish market: ‘the Cathedral city of Truro … has a wide range of national and independent retailers, a superb choice of places to eat out. … This is a wonderful location with the beautiful Cornish coastline never far away with many seaside villages and towns to explore and stunning coastal scenery nearby. The world famous ‘Bodmin Moor’ is a fabulous place to explore and take in its wild beauty … The city of Truro is ideally situated just off the A30 dual carriageway giving easy access to the city of Exeter and the M5’.

Neither are explicit sales events such as Stags estate agents’ ‘Move to the country show’ held in London on March 27th, 2014. Instead, they are designed to sell houses to a particular market. That market is found not in Cornwall, where people do not need to be told, or rather misinformed, where Truro is, but in south-east England. Demand is potentially huge, fuelled by an image of ‘lifestyle Cornwall’ and facilitated by price differentials between the south-east and Cornwall. New housing supply creates its own demand, something occasionally recognised in statements such as ‘future population growth will generally be facilitated by new housing development’. But this relationship is more normally reversed or has a discreet veil drawn over it, something not fit for discussion in polite (planners’) circles.

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