Demand and Supply for Housing Market in Epping

Only available on StudyMode
  • Topic: Supply and demand, Real estate pricing, Inverse demand function
  • Pages : 8 (2312 words )
  • Download(s) : 102
  • Published : May 6, 2012
Open Document
Text Preview
EXECUTIVE SUMMARY

The objective of this report is to outline the reasons as to what of the difficulties facing Sydney’s property market and analyse how the relationship between demand and supply influence Sydney’s housing market. This report will also evaluate the recent and future trends in Epping housing market. The outcome of this report will be submitted to the local government in order to provide recommendations in ways to improve the Epping area housing market.

Introduction and structure to the housing market

1.Sydney’s housing market focusing on Epping
1.1The level of demand and supply in Epping

2.Recent and future trends in Epping housing market

3.Factors influencing demand side of Epping housing market
3.1Increase in population affecting the demand in property market 3.2Increase in interest rates affecting the demand in property market

4.Factors influencing supply side of Epping housing market

CONCLUSION: Advice and recommendations
Summary of problems in the housing market, and the recommendation to the local government to increase supply of houses in order to alleviate the shortage faced in Epping housing market.

Introduction and structure to the housing market
A house is the biggest purchase that most people will make over their lifetime. The housing market in general would be considered to be that of a monopolistic structure, meaning that there are several number of suppliers with relatively unrestricted entry, and with a downward sloping demand curve providing suppliers with some control over price. The housing market is generally the same as any other commodity market and thus, adheres to the law of supply and demand. However, there are certain circumstances where it could differ, for example, ordinary commodity would rise in price if there is a shortage of supply and consequently consumers would purchase less at the higher prices set, but in the housing market higher prices could sometimes stimulate demand because consumers may decide that they should also purchase a property before further upward spiral in prices make them unaffordable. Furthermore, suppliers have the option of not selling their properties at any time and seek a better price or wait until a consumer comes at them with the right price. These kinds of occurrences may also happen in another type of asset commodity market, namely the stock market. This report will analyse Sydney’s housing market focusing on Epping by addressing: the housing market structure; levels of demand and supply in Epping; trends in the housing market; and factors influencing demand and supply in Epping.

1.Sydney’s housing market focusing on Epping
With the difficulties that have surfaced with rising house prices and supply levels being at an all time low, Australia is facing an interesting economic time. The sample focus on this housing market study is a Sydney suburb called Epping. House prices in Australian major cities have been increasing at an annual rate of around 12%, and Epping, being one of the more affluent suburbs in Sydney can effectively illustrate this phenomenon. It seems that the levels of demand are outstripping the supply – meaning that the cost of housing will come at a higher price due to the shortage of supply/stock.

1. The level of demand and supply in Epping

Supply and Demand for properties in Epping

Demand
Supply

This graph from realestate.com.au shows that Epping, being
situated in Sydney, indicates that Demand is greater than supply http://www.rs.realestate.com.au/cgi-bin/rsearch?a=sp&s=nsw&u=epping

The price of housing in Epping has definitely increased over the years. Five years ago the median house price in Epping is around $700,000.00 whereas currently the median house price in Epping is around or just over the $1,000,000.00 mark. The median house price in Epping has risen roughly by more than...
tracking img