The high price of the housing in Australia

Running head: ECONOMICS AND INTERNATIONAL TRADE
Economics and International Trade
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ECONOMICS AND INTERNATIONAL TRADE1
EXECUTIVE SUMMARY
This paper emphasises on the market conditions that influences the Australian property market.
The huge housing market of Australia going through several significant changes in recent years
because of change in demand and supply. This paper examines those factors of demand and
supply, which causes economic bubble in the property market of Australia. Different government
policies, lower rate of interest, overseas investment in residential sector and the growth of
income exacerbating the price of the household market. The price of housing market increased
drastically and impact on the Australian economy is massive. Here the market structure, degree
of competitiveness, factors influencing price and quantity of residential market is discussed. The
performance of the property market of Australia in 2018-19 and the factors impacting its
performance is examined in this paper. The overall analysis of the property market of Australia
and the relevant data to support the analysis is provided in the paper.

ECONOMICS AND INTERNATIONAL TRADE2
Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Market Description......................................................................................................................3
Changes in market conditions and their impact...........................................................................8
Conclusion.....................................................................................................................................13
Reference List................................................................................................................................15

ECONOMICS AND INTERNATIONAL TRADE3
Introduction
The property market of Australia rose at a faster rate from 1990 to 2017 and now
showing the signs of contraction. The drastic changes in price of Australian property market lead
to economic bubble. Several factors of economy affected the housing market of the country
(Austin, Gurran and Whitehead 2014). The supply and demand of the housing market influenced
by the immigration policy, subsidies and tax discounts of the Federal government. The high price
of the housing in Australia caused by foreign investment in housing property, lower rate of
interest and income growth. The competition and threats in the property market of the nation
regulated by the demand of housing. The crisis of Australian housing market can be controlled
with the help of growth in income generation (Bentley et al. 2016). The tax system of the
government of Australia push the policies like capital gain tax discounts and negative gearing
which hiked the housing price. The analysis of factors of supply and demand in housing sector
and their impact on price and quantity of housing of Australian is essential. As the economy of
Australia is largely depends on the household market. The turmoil in the residential market of
country affected the economic growth and development.
Discussion
Market Description
The property market of Australia includes the tradable land and its permanent fixtures
situated within Australia. In recent years, there is a property bubble in Australia. The residential
housing market of Australia gone through a drastic changes in terms of changes in prices. Some
cities of Australia such as Melbourne, Sydney, Adelaide, Brisbane, Hobart and Perth witnessed
soaring property prices (Atkinson 2015). In 2016, the median price of house peaked to $780,000