Chapter 6
Home sales boost consumer spending
http://www.canada.com/nationalpost/financialpost/homebuyers/story.html?id=d232ca32-3ed7-41f3-b33c-1634710471e0&k=13987
The article talks about the economic affects of home sales. A family of 4 in Ottawa estimates that they have spent $12000 on moving-related expenses. Another married couple who moved from a town house to a single family home cost them over $30000 for renovations. An industry study says that this is not excessive. Each sale on average generates $32000 in addition to consumer spending says the Canadian Real Estate Association. It highlights the importance of the housing industry. The report says that, “Resale housing transactions across Canada generate significant economic activity.” A major economic impact is job creation and it generates employment in different industries. Association chief economist Gregory Klump says that, “…more than 94,000 jobs are created in Canada each year as a direct result of resale housing transactions.” The report says that nearly 40% of those jobs were in the finance, insurance, and real estate sector. Jobs can also be created indirectly. The greatest impact was in BC where nearly 1 in 55 jobs created over the 3 years was a result of home sales. The level of moving related expenses and jobs created has increased sharply in the past 15 years. The annual level of job creation has tripled since the first study in the 1990s.
In chapter 6, we studied the components of aggregate demand. In this article, it refers to the consumption, the level of household spending on goods and services. The article talks about how the housing industry has increased consumer spending and therefore, has contributed a lot to the whole economy including jobs. There are many factors that influence consumption. All factors could be a possible influence. Disposable income is the amount of money that is left after taxes. Depending on the amount, consumption will increase. Depending on the interest rates, if they are low, the cost of borrowing is less so people will be willing to borrow and spend more. Expectations could possibly be the bigger influence as people are probably expecting future prices for homes and renovations are going to increase in the future so they purchase now. The psychological factor is also an influence because I think new families are pressured to spend more on better homes. New products like furniture or new technology may have put interest into families so spending patterns have changed. One of the bigger factors is the distribution of income among the poor and the wealthy. The prices may have affected a lot or a not because moving related expenses have majorly increased in the past 15 years, it may be just consumers willing to spend and the prices may have or not affected their decision. All these factors or at least some of them have influenced people’s choices in consumer spending, specifically in the housing industry. The housing industry has influenced a big part of consumer spending. It is benefiting the whole economy with many jobs and more.
Comment on Brian's blog, https://www.blogger.com/comment.g?blogID=36907360&postID=8657372381841433360
http://www.canada.com/nationalpost/financialpost/homebuyers/story.html?id=d232ca32-3ed7-41f3-b33c-1634710471e0&k=13987
The article talks about the economic affects of home sales. A family of 4 in Ottawa estimates that they have spent $12000 on moving-related expenses. Another married couple who moved from a town house to a single family home cost them over $30000 for renovations. An industry study says that this is not excessive. Each sale on average generates $32000 in addition to consumer spending says the Canadian Real Estate Association. It highlights the importance of the housing industry. The report says that, “Resale housing transactions across Canada generate significant economic activity.” A major economic impact is job creation and it generates employment in different industries. Association chief economist Gregory Klump says that, “…more than 94,000 jobs are created in Canada each year as a direct result of resale housing transactions.” The report says that nearly 40% of those jobs were in the finance, insurance, and real estate sector. Jobs can also be created indirectly. The greatest impact was in BC where nearly 1 in 55 jobs created over the 3 years was a result of home sales. The level of moving related expenses and jobs created has increased sharply in the past 15 years. The annual level of job creation has tripled since the first study in the 1990s.
In chapter 6, we studied the components of aggregate demand. In this article, it refers to the consumption, the level of household spending on goods and services. The article talks about how the housing industry has increased consumer spending and therefore, has contributed a lot to the whole economy including jobs. There are many factors that influence consumption. All factors could be a possible influence. Disposable income is the amount of money that is left after taxes. Depending on the amount, consumption will increase. Depending on the interest rates, if they are low, the cost of borrowing is less so people will be willing to borrow and spend more. Expectations could possibly be the bigger influence as people are probably expecting future prices for homes and renovations are going to increase in the future so they purchase now. The psychological factor is also an influence because I think new families are pressured to spend more on better homes. New products like furniture or new technology may have put interest into families so spending patterns have changed. One of the bigger factors is the distribution of income among the poor and the wealthy. The prices may have affected a lot or a not because moving related expenses have majorly increased in the past 15 years, it may be just consumers willing to spend and the prices may have or not affected their decision. All these factors or at least some of them have influenced people’s choices in consumer spending, specifically in the housing industry. The housing industry has influenced a big part of consumer spending. It is benefiting the whole economy with many jobs and more.
Comment on Brian's blog, https://www.blogger.com/comment.g?blogID=36907360&postID=8657372381841433360
posted by MarcoLeung at 1:28 PM
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