[Winblast-users] NUMBER ONE Success System

[Tommy Lee]

http://www.noss123.com/

The long-run price elasticity of supply is quite high. George Fallis
estimates it as 8.2 (Fallis, G. 1985), but in the short run supply tends to
be very price inelastic. Supply price elasticity depends on the elasticity
of substitution and supply restrictions. There is significant
substitutability both between land and materials, and between labour and
materials. In high-value locations, multi-story concrete buildings are
typically built to reduce the amount of expensive land used. As labour costs
increased since the 1950s, new materials and capital intensive techniques
have been employed to reduce the amount of relatively expensive labour used.
However supply restrictions can significantly affect substitutability. In
particular the lack of supply of skilled labour (and labour union
requirements), can constrain the substitution from capital to labour. Land
availability can also constrain substitutability if the area of interest is
delineated (that is, the larger the area, the more suppliers of land, and
the more substitution that is possible). Land use controls such as zoning
bylaws can also reduce land substitutability.

In recent years, many economists have recognized that the lack of effective
real estate laws can be a significant barrier to investment in many
developing countries. In most societies, rich or poor, a significant
fraction of the total wealth is in the form of land and buildings.

In most advanced economies, the main source of capital used by individuals
and small companies to purchase and improve land and buildings is mortgage
loans (or other instruments). These are loans for which the real property
itself constitutes collateral. Banks are willing to make such loans at
favorable rates in large part because, if the borrower does not make
payments, the lender can foreclose by filing a court action which allows
them take back the property and sell it to get their money back. For
investors, profitability can be enhanced by using an off plan or
pre-construction strategy to purchase at a lower price which is often the
case in the pre-construction phase of development.

But in many developing countries there is no effective means by which a
lender could foreclose, so the mortgage loan industry, as such, either does
not exist at all or is only available to members of privileged social
classes.
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