Understanding the Role of New Housing Supply Through Macro, Micro and Behavioural Perspectives

This chapter focuses on the new-build sector of the owner-occupied housing market. It intends to unpack what is meant by ‘housing supply’, emphasising that new-build housing supply is only one element of supply. The chapter sets out one view on the state of the art in understanding new-build housing supply in both macro- and micro terms. It concentrates on dispelling common errors in understanding by defining and exploring separate components of housing demand and supply. The chapter is written with an emphasis on understanding microeconomic and behavioural perspective on the behaviour of housing and land markets, and developer behaviour. It argues this to be important given the relatively new nature of these strands of the literature, and the growing awareness of their importance given that housing development is arguably the most ‘policy accessible’ sector of the housing system.