Causes of housing ‘demand’ – a summary

Demand for housing is as we have illustrated before due to a number of factors. We use the term demand loosely to include need although the two are different concepts. [Need is based on fulfilling a basic need for accommodation; demand is dependent on the financial resources available to a household to fulfill a desire for accommodation].

Basic needs arise from population growth and household change (more single person households for example). Population growth may be endogenous/internal or exogenous/external. With both the end result is the same an increase in the number of dwellings required.

Need can be met through households purchasing property but it may require support from society where households lack resources – in the past through local authority housing, now often through ‘affordable housing’. But demand is more than simply purchasing property to meet a need. Demand also arises where households desire a larger property or an additional property – whether to use as a second home or as an investment.

To summarise: we have to determine the components of need and demand. What are the contributory factors. Do we have to meet all need or all demand? Then we have to devise appropriate policies.

In essence we consider that continuing population growth is unsustainable and that demand for housing other than for direct residential use should be limited. Comments welcome.


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