2007 saw little growth in private housing rm&i and prospects for the sector are slim as the economic slowdown and rising inflation, would be expected to reduce real household disposable income and, consequently, consumer sentiment and spending. In addition, the difficult credit conditions restrict the funding available for rm&i.This is illustrated by the sharp falls in mortgage approvals, property transactions and equity withdrawal. As a consequence, the sector would be expected to perform poorly over the next two years. The housing market is positively related to spending in private housing rm&i. A buoyant housing market reflects considerable growth within the economy. High and growing economic activity increases householder's real disposable income and finance available for repairs and improvements. In addition, growth in the private housing market is likely to lead to rising house prices, which boosts consumer confidence and increases spending power by allowing householders to increase their borrowings and equity withdrawal. Furthermore, a significantly growing private housing market will have a high number of property transactions and new property owners are more likely to spend on repair and improvements during their first 12 months within a new property.
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