Property Market in Australia: Market Description, Changes and Impacts

Running head: Economics 0
Economics and International Trade
9/21/2019

Economics 1
Contents
Introduction......................................................................................................................................2
Market description...........................................................................................................................2
Changes in market condition(s) and their impacts..........................................................................6
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

Economics 2
Introduction
The assignment is prepared in regards with the topic property market in Australia. The purpose
of this assignment is to enhance the knowledge of the economic applications and to analyses the
market condition of the Australia and their impacts. The Australia property market is consisting
of the permanent fixtures and the trade of land which is located within the Australia. There are
many crisis has been seen in the Australian market which also lead to the decline in the per
capita GDP of the country (Wong, et al., 2018). The prices of the houses are drooped and many
crashes in the market have been seen. By the prices of the Sydney’s house are still increasing due
to higher demand and supply. The supply of housing is less in the Sydney in comparison to the
demand of the people as many people are immigrating over there which keep the prices of the
housing up. In this report the description will be given for the property market of the Australia
including the market structure, characteristics, degree of competitiveness, product or services,
etc. The impact of the changing market on the price and the quantity will also be explained with
the help of the appropriate diagram.
Market description
The prices of the property market is increasing in the Australian market as it is consist of the
permanent fixtures and the trade of land which is located within the Australia. In the year from
1890 to 1990 the prices of the property in Australia has grew up at the rate of the 0.5% yearly
after the inflation (Tapsuwan, et al. 2019). The rate has been increased in the faster manner from
the year 1990 to 2017 and also shows many contracting economic bubble. In the past few
decades drastic changes have been seen in the Australian property market specially in the
residentially housing. In the certain cities like Melbourne, Sydney, Perth, Brisbane, Hobart,
Adelaide, etc. are the major cities where the prices of the housing are continuously rising. The
reason behind increasing the prices of the housing is that the demand of the housing has
increased in the Australia and the supply is very less. There are any people who are immigrating
in Australia which was increasing the demand of the housing (Phillips and Joseph, 2017).

Economics 3
Australian property market is also known as the property bubble as it was becoming significantly
overpricing until the sustainable level can be reached related to the rents and the incomes. Due to
the financial crisis and the recession many changes have been occurred and the Australian
property market is crashing. There are many Australian housing prices have been dropped. Real
estate market is declining and the per capita GDP has also declined (Sisson, et al., 2019).
Demand of housing: The demand of the housing in Australia is continuously increasing at the
rapid rate and main determinants of increasing the demand of the housing are the demographic
factors. Demand of housing in the Australia has increased due to the certain factors which have
examined below:
Population growth: The size of the population has been continuously increasing in the Australia
which results in the greater demand of the housing. Due to the migration, many people have
shifted to Sydney and Melbourne which has increased the prices of the houses (Ley, 2017).
Income of the person: Income is the important determinant which helps in measuring the
income elasticity of demand. As the income of the person rises they are able to pay the high rents
which is also the basic reason the prices of the housing is increasing in the Australia as the
incomes of the person is increasing with the time (Morris, 2018). As the prices of the property
are very high so there are many economists who use their permanent income rather than their
annual income.
Availability of the house: Due to the increasing population and migration, the number of the
people living in the Australia has increased and it results in the declining the viability of the
houses. People over the Australia did not get the houses easily and if they get then it charges too
much prices. So due to the lack of availability of the houses the demand of the houses has
increased (Blunden, 2016).