How does builder's demand for work track with median house prices?

[mixedup]

How does builder's demand for work track with median house prices?

I'm interested in understanding what the demand for building works may be over the next couple of years, in particular in Brisbane. Is there a correlation to house prices perhaps? Perhaps there are some statistics available that I could look for?

Thanks

 

[tom32]

Real estate economics

I know it is a wiki but if you can get your head around how the gap between costs and price of existing homes creates larger volumes of supply you have an understanding of the supply curve.

As prices rise so to do profit margins for developers. High margins equals high motivation to supply. In Australia academics think of these profits windfall and governments move to tax them away which is a self feeding spiral of doom so far as affordability goes.

A second consideration is the price of land capable of being developed. You could have a house price crash of say 20% but if masses of land were brought on line in a place like say north west Sydney I believe still construction activity could be used to fight a recession if the government also removed the state infra levy, council levies and released enough land to see it fall by say 50%. Falls in residential parcels of land of 50% are not uncommon but this by no means translates into 50% fall for homeowners, nothing like it, they are like a levered play on house prices in an area.

see this link, apologise for it being a wiki but it isn't a bad read. You will also get an understanding of why when academics say it makes no difference if they tax away a windfall profit or make a developer build public housing as part of his development is a complete load of ..... Basically by doing this regular homebuyers are paying the price when they buy their first home.

http://en.wikipedia.org/wiki/Real_estate_economics