Why land price is high in Australia cities

ECONOMICS. 1
ECONOMICS ASSIGNMENT.
Name:
Institution:
Date:

ECONOMICS. 2
Economics Assignment.
a. Why land price is high in Australia cities. What are the major drivers of rising house
prices in these cities?
The first reason is that the current clique of generation who are occupying most jobs at
the city prefers houses with modern fittings and current designs. The landlord and other prospect
landlord are fewer in numbers and the tenants are many. The house owners are supposed to serve
a big population of tenants with their few houses this in turn causes a higher demand for houses
and land eventually causing the prices of houses and land to go up, when one tenant vacate the
premise the house owners due to higher demand increases the price for rent, the tenant willing to
occupy the house has no option other than to accept the rent being charged1.
Secondly, the number of investors who are willing to purchase houses and prime land at
the central business district in Australian Cities is very high as compared to the number of the
owners who are willing to sell their houses and land. When these investors buy this prime land
and houses at the inner city they will definitely buy these properties at inflated prices because of
the forces of demand and supply, that is many buyers but fewer sellers2.
Last but not least, is transport and lack of proper infrastructure. Australia is a vast nation,
it ought to have a system of fast and effective trains connecting extensive environs but in its
place citizens are crowd in the innermost city dwelling areas and pays inflated rents in order to
avoid taking hours commuting to work every day. It is only Melbourne that has widespread
railway system Sydney and Darwin just lacks the essentially required trains to sustain the
growing population.
b. Using appropriate diagrams explain the above situations?
1 Forrest, Ray, and Yosuke Hirayama. "Late home ownership and social re-
stratification." Economy and Society 47, no. 2 (2018): 257-279.
2 Kohler, Marion, and Michelle Van Der Merwe. "Long-run trends in housing price
growth." Reserve Bank Bulletin (2015): 21-30.