Essay On Real Estate Market

1437 Words6 Pages
Real estate market is one of important parts of national economy. First of all, the real estate market has three great pushing effects on economic growth. The first effect is the direct output of housing construction project; the second is the indirect output from housing construction project, such as the consumption of building materials, the using of transportation and other industries; the third one is related real estate services, mainly concentrated in house selling and buying services, house rental and leasing services, financial services (mortgage services) and house management services. Between 1997 and 2003 the housing market’s share of the economy was 17 per cent or less. Today, it accounts for nearly 19 per cent (Alini). According to Statistic Canada, GDP in the Real Estate and Rental and Leasing sector increased from $168.5 billion in 2007 to $192.5 billion in 2012. The increase in GDP reported between 2007 and 2012 represented a compound annual rate of 2.2%. Between 2011 and 2012, the total value-added of the Real Estate and Rental and Leasing sector increased by 2.9%. Second, house construction is a labor intensive industry, and plays an important role in creating employment. According to analysis from the Canadian mortgage and Housing Companies (CMHC), the total employment of the Canadian residential sector is approximically one million people. The employment of construction industry counts about 40%, manufacturing and transport occupy about 30%, other industries, including trade, finance, insurance, property management service, have the rest of 30% . When the construction industry creates one new job, which can create 2.3 jobs in related industries. Third, real estate is the main component of family wealth in Ca... ... middle of paper ... ...new immigrants will play an important role in real estate market. When quantity demanded is greater than quantity supplied, a seller's market occurs, any prices seem to be possible, and there is not the highest, only the higher. The pricing and the performance of the stock market are in the same way. Investing in real estate market as buying a "never-bankruptcy" stock when the demand is greater than the supply. However, the market price fluctuations and adjustments are inevitable. Real estate market prices do not need all the owners to be involved in order to determining the actual market prices. When the market panic happens, the high prices do not get support and market crashes, investor confidence and the value of the market have to afford a serious blow, the real estate market recovery will take a very long time. America real estate market is the best example.
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