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Booming housing market Assignment PDF

   

Added on  2021-06-17

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BOOMING HOUSING MARKET1Booming housing marketStudent’s nameProfessor’s nameInstitutionDate

Booming housing market2With respect to the booming business in house markets in Australia, specifically in the two capitals of Sydney and Melbourne, the question that remains unanswered is the reason as to why housing prices are rated relatively so high yet in Australia there are more than enough households. This still remains a mystery despite various common clarifications and explanations.Some of these explanations include that the demand of housing in Sydney is so high that the suppliers are not able to meet the peoples demand[CITATION Bro12 \l 1033 ]. Others may argue about the few rich individuals who compete in showing off by buying these high priced houses thus increasing their prices due to increased competition. This paper shall the various reasons that led to high prices.One of the drivers of high prices of housing in Sydney and Melbourne is increased foreign investments. For instance, the Chinese residents who are relatively rich have been knownto invest in buying these houses. The increased competition between the foreign investors and the local investors has led to the house owners to dramatically increase the housing prices so as to accommodate the pressure[CITATION Coo16 \l 1033 ]. The supply and demand curve shifts due to these high binders who compete in buying these flourish houses found in the two capitals. These Chinese investors have even caused their government and the government of Australia to such for policies which shall regulate this massive investment and movement towards housing in Sydney.Friendly government regulations have also participated in driving housing prices up. Regulations such as giving permits and licenses to housing contractors and also providing passports to these foreign investors have led to massive and high housing prices over the past few years[CITATION Dep18 \l 1033 ]. The government generates income from these foreign and

Booming housing market3local investors who buy these high priced houses hence, the investors been a source of income and revenues. These regulations have dramatically led to high housing prices.Urban planning and land supply has also contributed to the high housing prices in Sydneyand Melbourne. The two capitals authorities, such as the housing regulators and urban planners have discovered that the two cities are densely populated by the wealth community thus these may be seen as a source of income[CITATION Gur17 \l 1033 ]. The urban plan may also have set a degree of living standard that might be met by only a few selected groups by the criteria of high standards thus leading to the increased housing prices. This is because only the local and foreign investors who are wealthy enough could only meet the criteria thus leading to high prices. For instance, requirement of by the local authorities to meet criteria of construction of real estates. High construction and maintenance cost may have pushed the housing prices up.Relatively high tax associated with property owning is another suspected driver of high housing prices. If high taxation rates are associated to housing construction, this in return will relatively lead to high housing prices[CITATION Hul14 \l 1033 ]. This is as a result of contractors meeting their construction cost and also generating benefits out of the effort. These taxes imposed such as increased taxation in building and constructing materials may lead to end result of houses been priced highly.Low interest rates may be yet another driver of high housing prices. Interest rates related to living standards and cost of construction may be relatively low hence to increased demand andsupply[CITATION InH16 \l 1033 ]. In return, this leads to increased prices for both properties and services such as housing prices. These low interest rates enhance maximum profit generation thus positively and widely encouraged by the natives of Sydney and Melbourne.

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