1. Construction & Property Economics Lesson 1 – Introduction

3. Introduction to Construction & Property Economics
Aims
To identify and evaluate the core issues of economics.
To develop knowledge and skills on economic analysis relevant to the construction and property industry.
To apply simple economic concepts and decision making techniques to construction /property scenarios

4. Time Table for ADCM/Bridging Construction & Property Economics
Day
Date
Time
Module
LESSON FOCUS
Saturday
2-Mar-19
2.30 PM PM
MBE - Lesson 1
Intro Construction & PPty Econs
Thursday
7-Mar-19
7.00 PM PM
MBE - Lesson 2
Basic Concept of Supply & Demand
Tuesday
12-Mar-19
MBE - Lesson 3
Micro and Macro econs wft build environment
16-Mar-19
MBE - Lesson 4
Demand and supply on construction industry
Wednesday
20-Mar-19
MBE - Lesson 5
Roles of the ppty Sector and the construction industry
23-Mar-19
MBE - Lesson 6
Cycle of activity within the ppty sector and construction industry
26-Mar-19
MBE - Lesson 7
Inherent relations between economy, construction and the firm
30-Mar-19
MBE - Lesson 8
Issue of current interest rate, inflation and unemployment
2-Apr-19
MBE - Lesson 9
Revision and focus
6-Apr-19
1.00 PM PM
MBE Exam
4 Questions all 25 marks over 3 hours
Lecturer
Venue
MBE - Management in the Built Environment (TG15MBE)
Lan Luh Sing (Rebecca)
Refer to Plasma TV

5. Introduction to Construction & Property Economics
Lectures – Twice a week , 3 hours each
Attendance at lectures is very important
Attendance is monitored.
Make notes and maintain a file
Exam would be on Sat 6th April 2019
3 hours, 4 questions each 25 marks

6. Good Practice Attend Lectures – arrive on time
Revise and enhance your notes
Participate in all session formats
Manage your time effectively
Maintain a conducive learning environment
Engage in discussion with your peers
Communicate with the module tutor
Mobile phone use during lectures?

7. What is Construction & Property Economics ?
A study of people and how their action affect the construction industry and property values
Study that uses economics principles
Micro and Macro Analysis
Analyzes trends
Consider the supply (Construction) and demand (Property)
Links general economics theory and real estate practice

8. Setting the Context
What is economics about?
EVERY DAY LIFE!!

9. What is economics?
Economics originates from the Greek word for household management
Householder
UNLIMITED WANTS

10. What is economics?
Basically, economics is about using/managing scarce resources (and making decisions about their use)

11. Defining Economics KEY CONCEPTS
Economics is the study of rational choice under conditions of scarcity
Opportunity Cost is the best alternative that you gave up when making a choice

12. Unlimited Wants Vs Limited Resouces

13. Defining Scarcity and Choice
Rational Choice means people making
Calculated, self-interested choice after
Risk
Cost
Benefit

14. Important Economics Key Concepts
Unlimited Wants
Limited Resources
SCARCITY
Make Decision
Opportunity Cost
Rational Choice

16. Simplest view of an economy
Consumer
(householder)
People buy goods and pay for them
- Property
Producer
( Construction
firm)
Construction firms pay people to build property

17. Environment Economic View

18. Construction Firms
Revenue from sales properties and services (lease/maint) of properties they constructed.
Revenue
Property Sales
Ppty Mgt Services
Refurbishment
Lease/Rent

19. But in real life, consumers have to pay taxes to the government, buy goods etc
Households
Abroad
Buy property
Taxes
Government
Construction
Firms
Sells property abroad and imports materials
Abroad
Taxes
Government

20. Government – the 3rd element SG IRAS FY2016/2017 Tax by Type
What are the taxes that are tied to construction and property sector ?

21. This leads to a more complicated circular flow
consumer
People buy goods and pay for them
Construction Firm
Construction firm pays people to work for them
Government
Banks

22. Economic Systems
Economic Systems are concerned with the ownership and control of resources
2 main types of system:
Market Economy: resources are allocated through the price mechanism and the ownership and control of such important resources (such as land and capital) which are in the hands of private firms and individuals.
Command Economy: resources are allocated by a central planning authority and key industries and resources are owned and controlled by the state.
What type of economy is Singapore?
Which country is govern by Command Economy ?

23. Main Branches of Economics
Microeconomics: is the study of individual decision-making by both individuals and firms
Macroeconomics: is the study of economy-wide phenomena resulting from group decision-making in entire markets. It deals with the economy as a whole.
Many overlaps between micro
and macroeconomics exists
eg. Unemployment, inflation

24. Micro Vs Macro Economics
Micro Economics
Deals with individual’s economy behavior
Deals with the pricing of a commodity in a particular industry
Price is the basic parameter in micro economics
Study of micro economics is important for resource utilization, public finance, and making business decision
Macro Economics
Deals with aggregate behavior of people in general
Deals with general price level in the economy, eg. National Income , Consumer Price Index
Income is the basic parameter in macro economics
Study of Macro Economics is important for the formulation of economic policy for whole nation

25. The SG Construction Industry Context
Why is the construction sector an important part of the SG economy ? How can you relate it to property? Why is the value of property important to the SG economy?

26. Construction Industry Vs Property Market

27. The Nature of Construction Economics
Construction Economics is a branch of the general economics
It consist of the application of the techniques and expertise of economics to the study of construction firms, the construction process and the construction industry

28. Characteristics of Construction
The fall into 4 main groups
The physical nature of products
The structure of the industry together with the organization of the construction process
The determinants of the demand
The method of price determination

29. Correlation between Construction and Property Market in Singapore

30. What DO YOU THINK the economic outlook of the Singapore is in 2019?
Finally!
What DO YOU THINK the economic outlook of the Singapore is in 2019?