Housing Construction as a Leading Economic Indicator

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The construction industry, and especially residential building construction activity, represents a significant part of a country’s general economy, directly affecting GDP through construction, maintenance and renovation, as well as indirectly with notarial acts and banking transactions. Indeed, in many economies, residential building activity is at the heart of economic growth and, consequently, acts as a regulator in economic development. The main purpose of this paper is to contribute to the debate on the significance of pursuing a suitable government policy on the real estate market. The research objectives are: a) to review the existing literature regarding the importance of the housing sector in the general economy; b) to “capture” the link between residential construction activity and economic development in Balkan Peninsula, pursuing supplementary research for the country of Albania; and c) to present the results of the aforementioned study in order to draw important conclusions.

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