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d to be concluded that in the short run the affect of demand on prices is more often more than supply.

However, if supply of housing does not return to its incorporate its strategy of adopting to new changes and if it is inelastic in nature then however it is more likely that an increase in the demand factor will most often lead to a big hike in the prices of housing.

Long run supply:

When looking into the long run supply, there are many factors which can affect and be an obstacle in the process of supply. To construct the houses or flats or a building, the first thing is to take the permission or check the availability to construct the property. This could be tough in rural areas as it is not easy to get the permission.

Builders usually have to calculate the opportunity costs, if it is better to invest in some other areas. They will have to check the total costs and returns which they may get once the property is sold.

3. Analyzing the house prices figures:房价数据分析：

The below figures best illustrate the graphs which defines the rise and fall in the housing prices during the last three years, which apparently were the cause after recession and mainly due to unemployment.

Due to recession, many market leaders being it retail industry, banking, or IT companies went into liquidation or administration, following shortage of money in the money market. Accumulating all the facts and analyzing the causes there was a steep rise in unemployment and all the companies adopted the policy of redundancy to safeguard their reputation and stand in the market, which started causing the houses to go on sale. Sub-prime mortgage lending was one of the major drawbacks for all the banks and financial institutions, which reflected lack of stronghold on the banks credit analyzing capabilities and the poor judgement of lending to people who cannot afford to keep their monthly mortgage payments.

In the year January 2007 the house prices began to increase until January 2008, after which the average house prices slowly started to creep down. The average house price in the month of January 2007 was ￡173,665 with a monthly change of 1.1% and an annual change of 8.2%. The price index was increasing till the January 2008 with average house price of ￡183,845 with a monthly change of 0.5% and an annual change of 5.9%.

From the month of January 2008 the house prices began to crash to a little low and in the month of January 2009 the average house price was ￡156,894 with a monthly change of -0.5% and an annual change of -14.7% which was the biggest since January 1996, which had a similar annual change of -3.9%.

When coming to the house sales volumes, it is quite obvious when the house prices increase there would be very few people who would be looking to buy houses or new properties, due to which the banks had to bring some new market products for mortgages such as the self certification mortgages, which allowed the people to self-certify their income levels when they want to purchase the houses. The other type of mortgage was 100% mortgage with no deposits required as a security to the banks.

As the graph below depicts the decline in curve in the sales figures for the year 2007-2008 until January 2009 because of the rise in house prices, which was not quite common, but it slowly started to increase from January 2