Second, the real estate sector makes a significant, if volatile, call on resources and labour in our economy, thereby influencing wages and price pressures more generally.
While residential investment has accounted for only 6 per cent of GDP on average over the past 30 years, activity in the sector has been four times more volatile than the overall economy  BIS central bankers’ speeches  1  over that period. Thus developments in housing substantially affect the business cycle and by extension inflation.