Effect of New Construction in City Centre Residential Accomodation

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The housing market differs from most other market in that the current stocks available dominate over the flow or supply of new buildings produced. Therefore should any changes occur to demand then the increase in supply to bring equilibrium back would take some time.  Due to this factor the prices are dedicated more so by the supply of housing that comes on to the market place.

Figure 1

Above show how an increase in number of properties sold per month can lead to a reduction in the value of each property, as there is excess supply in the market. However with properties there are outside factor which can influence prices, some of this are

  • Development works which improve the environment in the city center and encourages people to move to specific locations.
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  • Release of space held vacant
    By comparison to the rest this will often provide the least number of properties but can provide the quickest solution to short term fluctuations.
  • Brownfield development this can be done by a changing the use of land to suit the most profitable type of properties possibility residential.
    This may only provide a few more than the utilization of empty buildings, but can have a time lag when delayed by the planning controls in place by the government.
  • Release of green fields for development into new properties, given the location of a city centre this might ...

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