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Questions:
Q1) Research and briefly describe the trend of the home housing market in Australia over the past 30 years in no more than 100 words (Hint: Describe the pattern in this trend).
Q2) You are to answer the below sub-questions on how each event would affect the home housing market in Australia using key economic concepts, principles and theories taught in Week 1 and 2. Treating each sub-question as a separate event and draw separate diagram for each separate event, explain and illustrate how each event ceteris paribus will affect the supply curve, demand curve, equilibrium hiouse prices and quantity in the home housing market in Australia:
i) Cost of renting becomes expensive and more people found buying a house to be a cost-effective option.
ii) With consecutive increases in mortgage interest rates, more and more borrowers are selling selling their houses as they find it difficult to meet their mortgage repayments.
iii) People expect housing prices to fall. iv) Several big housing builders made huge losses due to costly materials, shortage of labour and shipment delays and have gone into liquidation
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