International housing market analysis based on housing commencements

Additions to the aggregate housing stock are a broad measure of the state of an economy and overall level of confidence in a particular region over a designated period. This is due to the direct and indirect effect (e.g. employment in the housing construction industry) upon on the local economy and is linked to the confidence of local households in the future direction of housing investment, the level of housing affordability by households as related to employment levels and the relationship between supply and demand in each region. Another consideration is the ability of the government to monitor and successfully intervene in the operation of the household market (e.g. mortgage interest rates) with the intent of restricting an over-supply situation which may take years to fully recover. The analysis in this section examines new housing commencements for Scotland, Australia, USA and Canada over an extended time period with the specific focus placed on the periods before, during and after the high profile global financial crisis in 2007-2008. The graph in Figure 1 was adapted from data sourced from The Scottish Government (2013) and covers the 15-year period between 1998 and 2012. With the exception of 1999 there were been relatively few years with substantial additions to the housing market. However, the effect of the GFC can clearly be observed post 2007 although by 2012 there was relatively change from the previous year.