When applied to real estate, the principle of supply and demand refers to the ability of people to pay for housing coupled with the relative scarcity of real estate. For any type of good or service to have value in any marketplace, it must possess four characteristics: demand, utility, transferability and scarcity. Demand is a need or desire coupled with the purchasing power to fill it, whereas utility is the ability of a good or service to fill that need. Scarcity means there must be a short supply relative to demand. Air, for example, has utility and is in demand, but it is not scarce. Finally, a good or service must be transferable to have value to anyone other than the person possessing it.
Tagged in:
Annual Population Increase Growth Size
Demand and Supply of Housing units
Demand and Supply of Singapore Commercial market
Four factors of production
Increase in GDP Gross Domestic Product per Capital
Increase population Measures
Infrastructure to support the projected growth in population size
Labour capital land goods and services
Objectives in increasing Population
Population growth measures
Present value of property
Principle of Demand and Supply Fundamentals
Property value in marketplace
Residential Property Price Index versus GDP growth
Scarcity in land