Real estate, and housing markets

Abstract

This chapter presents a comprehensive review of the fundamental concepts regarding real estate and housing markets. It aims firstly to provide an overview of the specific features of real property in general and housing in particular that make property a unique and multidimensional “good." Building upon that, the chapter presents the key analytical tools extensively used in the relevant literature to capture the functioning of the real estate market as a set of interconnected markets, namely, the user (or space) market, the capital (or investment) market, and the development market. In this context, property development is examined as a process serving to reconcile long-run demand and supply imbalances generated in the user and investor markets. With regard to the housing market, after an overview of the key determinants of housing demand and supply, this chapter places its focus on the link between housing and the macroeconomy. Finally, the chapter explores the role of financial internationalization in the operation of real property markets and housing in particular, in the context of an increasingly globalized economy.