Economics Assignment: Housing Affordability in Australia

This economics assignment explores the issue of housing affordability in Australia, including causes, stakeholders, economic concepts, and alternative solutions. It provides recommendations for improving the housing market.

Running head: Economics Assignment
Economics Assignment
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Economics Assignment
Table of Contents
Introduction...........................................................................................................3
Main Issues...........................................................................................................3
Stakeholders..........................................................................................................5
Economic Concepts..............................................................................................6
Alternative solutions.............................................................................................9
Conclusion & Recommendations.......................................................................10
Reference list......................................................................................................11

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Economics Assignment
Executive summary
The development of economy of the Australia is having high crisis and in
order to increase the development of better policies that will not only indulge
the development of economy and better demand. On the other hand, it has been
seen that in order to increase the development of better accessibility of
government policies the Australian economy will be able to increase the
demand and supply of housing.

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Economics Assignment
Introduction
In the economy of Australia, the condition of the housing is one of the
biggest concern for the individuals. The study is important in the sense that it
will identify the housing affordability is one of the biggest concern in modern
world. The study will identify the main economic reason that the housing
market of Australia has now become instable in nature. On the other hand, the
study will definitely indulge in highlighting the importance of the stakeholders
in improving the business. Through the development of economic activities, the
importance of stakeholders in improving the situation in the economy. The
study is significant in the sense that it will definitely increase the scope of
developing the policies that will increase the effectiveness of economic
efficiency.
Main Issues
1.1Causes
In 2012, the Port Macquarie on the New South Wales was the most
affordable housing market in Australia and it was fifth least affordable market
in the global market. It was the most unaffordable housing market after Sydney.
Some of the factors has been identified behind this outcome. First factors that
has been identified is the way the Australians are living their lives.
Communities like Wingecarribee and Tweed Heads have different standard of
living. On the other hand, southern highlands of NSW and Queensland-NSW

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Economics Assignment
border are the most attractive places for the people having leisure and serving
retirements. Both baby boomers and Gen X are moving to these communities in
order to improve their standard of living. In doing so, they are pushing up the
price of housing. Most of the time it has been seen that they are buying
properties in which they are only staying for two-three weeks in a year (The
Conversation, 2017).
The second factor that has been seen among the Australians is less
prosperous and less frenetic. Average incomes are less in towns and in coastal
areas compared to the suburbs. This is important in the sense that households
are paying more money in order to meet the rents or mortgages. Along with
these two factors the third challenges that the economy of Australia are having
is the increased amount of land costs that is acting as hindrances in building of
new houses.
In some communities the planning restrictions has been implemented in
order to protect the land for agriculture is also posing tough challenge for the
development of new housing. The residents who are living in the city for a long
term has successfully influenced the government to levy the restrictions in the
housing planning and the lack of government investment is also acting as main
problem for the development of new housing (The Conversation, 2017). In
order to increase the development of the housing resources will not only induce

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Economics Assignment
the government and households to increase the consumption of housing in an
efficient manners.

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Economics Assignment
Stakeholders
3.1 Stakeholder 1
In most of the business, the development of the business is important and
it is directly correlated with the performance of stakeholders that is going to
increase the long run growth of the economy in an efficient manner. However,
in order to make any business the roles that has been played by government is
important. On the other hand, the government is having lack of interest in
investing in the housing market (Baker and Lester, 2017). The development of
the housing problems is increasing in Australia because of the fact that in most
of the areas, people who are living long within the country has successfully
influenced the government to implement planning restrictions that has created
problems in the form of lack of housing in the country. Many governments in
Australia are shedding their public and private housing stocks in rural and urban
areas.
3.2 Stakeholder 2
The second stakeholder is the people living in the country. However, in
Australia the lack of average wage is not allowing the economy to increase their
investment in the housing market. The housing market is becoming highly
unstable with increase in price. The lack of average wage is going to increase
their consumption price of housing affordability. When they are comparing
them with the Gen X consumers who are affording the houses just for 2-3 weeks

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Economics Assignment
in a year. On the other hand, through the development of this kind of pricing, is
going to increase the price of the products and the housing prices. Through the
development of prices the long run housing prices are increasing and are having
impact on the long run.
3.3 Stakeholder 3
The third kind of stakeholders that are important for the development of
the business is the investors. This is important in the sense that through the
development of resources, it is highly important for the business houses to
indulge the development of housing and in most parts of Australia the building
of new houses are not possible (Chan and Ma, 2016). This is because, the
development of investment is not happening mainly because of lack of
government interest that is not getting aligned with the interest of private
investors. On the other hand, through the presence of lack of resources and lack
of effectives policies will not only indulge in the development of resources but
will indulge in the improvement of the business.
Economic Concepts
4.1 Economic concept 1
From the whole study it can be concluded the fact that in the economy of
Australia is having lack of supply of new housing that is not going to increase
the standard of living. Due to majority of factors, it has been seen that both the
demand and supply of the housing is decreasing. Moreover, the decrease in the

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Economics Assignment
demand of the housing is more or less forced in nature. Through the
development of better policies, the economy of Australia are having lack of
supply.
Figure 1: Decrease in the supply of housing
(Source: Created by Author)
The decrease in the supply curve of the housing is resulting in the development
of increase in prices and decreases in the quantities supplied. The rise in price is
definitely going to make problems for the households.
4.2 Economic concepts 2
The second economic concept that has been highlighted in the concept is
that the lack of standard of living among the people living in Australia. On the
other hand, through the development of better policies the economy will be able

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Economics Assignment
to increase the average wage that will automatically increase the internal
demand of the economy. Through the increase in the wage the demand of
housing will automatically increase and that will increase the scope of the
government to regulate the policies.
Figure 2: Decrease in demand
(Source: Created by author)
The decrease in the internal demand has reduced both the price and quantity of
housing within the economy.
4.3 Economic concept 3
The third concept that has been witnessed in the study is that the lack of
government interest in the investment in new housing. On the other hand,

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Economics Assignment
through the development of lack of government investment will indulge the
improvement in the economic policies that will not only indulge the
development of resources but will also include the development of better access
to the improvement in the supply and demand of the economy. On the other
hand, it is important for the economy to increase the development of better
accessibility of policies.
Alternative solutions
5.1 Alternative solution 1
It is important for every government to increase the development of
resources and the government will be aiming to increase the policies that will
not only increase the development of policies. It is important for the economy to
indulge the development of housing policies that will not only increase the
development of resources but will also improve the marketing of the products.
3.2 Alternative solution 2
It is important for the economy to increase the development of wages of
the economy so that the individuals can increase their demand, on the other
hand, the increase in the implement the housing policies will also allow the
economy to bring in efficiency. New housing planning restrictions need to pull
off and in order to increase in the development of better accessibility. Moreover,
on the other hand, through the development of resource gap, the minimisation of
external costs will decrease.

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Economics Assignment
3.3 Alternative solutions 3
If the government can increase the development of housing then it will
automatically increase the demand of housing and will definitely increase the
supply of economy. On the other hand, through the development of better
accessibility of supply the economy will definitely improve.
Conclusion & Recommendations
The whole study is looking to incorporate the development of better policies
that will not only increase the development of demand but also the supply of the
new housing will increase. Through the improvement in the working policy of
government the economy will definitely indulge in better supply of new housing
that will increase the condition of housing.

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Reference list
Baker, E. and Lester, L., 2017. Multiple housing problems: A view through the
housing niche lens. Cities, 62, pp.146-151.
Beer, A., Bentley, R., Baker, E., Mason, K., Mallett, S., Kavanagh, A. and
LaMontagne, T., 2016. Neoliberalism, economic restructuring and policy
change: Precarious housing and precarious employment in Australia. Urban
studies, 53(8), pp.1542-1558.
Chan, C. and Ma, T., 2016. Energy efficiency housing in South Australia–A gap
analysis between the expected and actual benefits. Procedia engineering, 164,
pp.446-452.
Dufty-Jones, R. and Rogers, D., 2016. Housing in Australia: A new century.
In Housing in 21st-Century Australia (pp. 15-32). Routledge.
Gurran, N. and Phibbs, P., 2015. Are governments really interested in fixing the
housing problem? Policy capture and busy work in Australia. Housing
studies, 30(5), pp.711-729.
MacKenzie, D., 2018. Some Reflections on the Policy History of Youth
Homelessness in Australia. Cityscape, 20(3), pp.147-156.
Morris, A., 2015. The residualisation of public housing and its impact on older
tenants in inner-city Sydney, Australia. Journal of sociology, 51(2), pp.154-169.

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Economics Assignment
Ong, R., Dalton, T., Gurran, N., Phelps, C., Rowley, S. and Wood, G.A., 2017.
Housing supply responsiveness in Australia: distribution, drivers and
institutional settings.
Rowley, S., Leishman, C., Baker, E., Bentley, R. and Lester, L., 2017.
Modelling housing need in Australia to 2025.
The Conversation. (2017). A housing affordability crisis in regional Australia?
Yes, and here's why. [online] Available at: https://theconversation.com/a-
housing-affordability-crisis-in-regional-australia-yes-and-heres-why-71808
[Accessed 26 May 2019].