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6 Most Important Demand Concepts of Real Estate

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6 Most Important Demand Concepts of Real Estate

There are several demand concepts that have different meaning:

1. Effective demand

2. Ex-ante demand

3. Ex-post or realized demand

4. Pent-up demand

5. Aggregate market demand

6. Individual project demand

Below we explain these demand concepts.

1. Effective Demand 

Effective demand refers to demand that is supported by purchasing power. Thus effective demand for a particular type of housing refers to the number of households that are active in the marketplace looking for that type of housing and have the income that allows them finance the purchase either through mortgage or cash.

2. Ex Ante Demand 

Ex ante demand is the aggregate demand in a market before interacting with the marketplace and the limitations that may presented in the marketplace in terms of availability and pricing of desired property or rental space.

3. Pend-up Demand

The existing but not yet realized demand is often referred to as pent-up.

4. Ex-Post or Realized Demand The ex-post or realized demand is the realized demand after the interaction of demand with supply as reflected in transactions (either sales or rental contracts).

5. Aggregate Market Demand 

Aggregate demand refers to the total demand for a particular property type in a market. For example, the total number of households in a market represents the realized aggregate demand for housing of all types.

6. Individual Project Demand Individual project demand refers to the demand for a particular project, either for units/space for sale or units/space for rent

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