Housing Sector and the Economy: Global Experiences

The housing sector plays a pivotal role in economies across the globe. Its far-reaching social and economic implications are strong enough to build or unbuild nations. For instance, India and the US were able to tide over the recent recessions by relying on the steady growth of their housing markets. On the contrary, one of the causes of the South Asian economic crisis was the collapse of housing markets. In developed countries, the housing sector’s contribution to the national GDP ranges between 15 and 20 percent, while in developing countries it varies between 3 and 5 percent. The real strength of the sector lies, not in its direct contributions to the economy, but in its “multiplier or ripple effect” (an ability to stimulate economic activity in other industries), due to the several linkages the housing sector enjoys with other industries, of an economy. The National Association of Realtors, USA, research findings reveal that in the US, a dollar increase in direct housing activity increases the overall GDP by $1.34 to $1.62, due to the multiplier effect. This book captures the relationship that exists between the housing sector and the economy by recounting the experiences of different states/countries from around the world. The experiences reveal but one common truth that housing is a global problem. Economic development and prosperity cannot really be achieved by simply ignoring the housing sector.