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Economics Assignment: Market Price

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Added on  2020-05-28

Economics Assignment: Market Price

   Added on 2020-05-28

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Running Head: ECONOMICSEconomicsName of the studentName of the UniversityAuthor note
Economics Assignment: Market Price_1
ECONOMICS1Table of ContentsAnswer 1..........................................................................................................................................2Answer 2..........................................................................................................................................6Answer a......................................................................................................................................6Answer b......................................................................................................................................8Answer c......................................................................................................................................9References......................................................................................................................................10
Economics Assignment: Market Price_2
ECONOMICS2Answer 1The focus of the IMF article is to portrait the picture of price rise in Australia. Thescenario of rapidly growing housing price considered as massive overvaluation in the propertymarket. The argument of overvalued housing price is countered by stating technical flaws inhouse price computation. Price of houses is Australia during this time has accounted anastonishing growth rate lagging behind many of the nation holding same position as Australia.Several factors contributed to price inflation in the housing market. Rise in income and easyaccessibility to loans are two primary factors. Housing prices are grown at an extraordinary ratein some specific capital cities of Australia.In the event of housing price evaluation, two major members are Melbourne and Sydney.These are the two vital capital cities of Australia in terms of every economic aspects. Both theregions have passed through a rapid price growth in the housing market. Prices of house areovervalued by more than 20% during this time (Baur and Heaney 2016). The average price ofhouses helps to get an overall idea of housing prices. A more accurate measure of centralhousing price is median. The following figure represents the median price trend in different citiesof Australia with special attention given on Sydney and Melbourne.
Economics Assignment: Market Price_3
ECONOMICS3Figure 1: Trend in Median house price (Source: imf.org 2015)When compared with median housing price Sydney is in first place recording a thoughfluctuating but upward rising trend in housing price. After Sydney, Melbourne recorded anunexpected growth rate in housing price. Other capital cities though accounted a rise inresidential price but still are outpaced by the two central cities. The figure shows clearly thatgrowth of housing price in Melbourne is more than most other cities in Australia. The more thanexpected growth of housing price is often viewed as overvaluation of residential property(Windsor et al. 2015).
Economics Assignment: Market Price_4

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