Houses and Housing Finance


Housing is the necessity of life has significant importance. It demands changes from higher to a lower level as we move from the developed countries to the developing countries. A bad fact of the life is that a large portion of the world population is lacking this blessing due to unaffordability.

Buying a house can be considered as the biggest investment of one’s life and it could take years to buy a house. The house builders, banks, and real estate agencies with mutual understanding could provide a way to minimize this yearly distance ultimately facilitating the house buyers. Housing Finance could be a solution for the people, especially with low income. Such facilities could provide shelters, self-confidence, loyalty and better economy of the nation.

Role of Well-functioning Housing Markets

Housing markets can play important role in providing the shelters along with standard life. Their influence could bring many positive changes such as good health, a good living standard, prospective economy and crime reduction.

Housing Finance

Housing Finance is one of the major components of the housing markets and its better understanding can provide efficient functioning. It is thought that buying a house is a major purchase and generally the prices for developed and developing countries ranges from four to eight time of the annual income.

Generally, the housing finance term is divided into two categories; one is the supply and the other being the demand.

The supply of housing finance depends on both the provision of available funds from the lender and circulation of funds between the lending institutions. The flexibility provided by the lender in terms of long-term payments could result in affordable housing.

The demand for housing finance actually arises from the increasing demand for houses. It depends on the house formation rate as well as the annual income.

Role of Legal rights for Housing Finance 

The extent of the finance system is expressed in terms of legal rights strength. Those countries that have strong legal rights for the lenders and borrowers have a better housing finance system.


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