Housing construction industry, competition and regulation

Housing construction plays an important role in national economies, accounting for between 3 and 7% of gross national product. It is a sector of the economy that has long been criticised for its lack of ongoing innovation and productivity improvement, in turn acting as a drag on the overall economic growth. These criticisms are not restricted to one or two countries, but are widespread across the developed world. There are two broad explanations for these problems. One focuses on excessive or ill-considered government regulation or intervention, which can prevent competitive markets from being a spur for innovation, heightened productivity, and high levels of consumer satisfaction. An alternative explanation is that the problems stem from the way housing construction, distribution, and use are organised rather than the regulatory framework within which they take place.