Using Demand and Supply Analysis Identify Those Factors Which You Think Have Been Important in Affecting House Prices in the Uk over the Past Five Years or so.

The housing crisis of 2008 can trace its origins back to the stock market trends of the mid- to late 90 's. During a period of extended growth in the stock market, increased individual wealth among investors led to generalized increases in spending, including in the housing market. With more disposable income in the pockets of consumers, the demand for housing increased in the late 90 's. Due to the fact that homes are large projects and their construction takes a large amount of time, the supply of homes in the market is inelastic on the short term. Because of the fixed supply of homes, as per the law of supply, which

Secondly, in the past few years, household debt has increased rapidly. On one hand, it has deep influence on each Australian. With one dollar earned, one Australian is now in debt for two dollars. Australia’s debt for property is just lower than Switzerland in the whole world and doubles as much as America. Compared with the increase of house debt, salaries of Australians have remained steady, which means people’s capacity to repay debt hasn’t improved. Australians have been recorded low wage growth. From January to March 2017 wages grew just 0.5 percent. Over the previous year, wages grew a total of 1.9 percent. From 2011-2016 wages grew just 13 percent (Anderson 2017). Considering price to income ration index, housing affordability in Australia has broadly declined in the past few years. Nevertheless, it’s very easy for anyone to get loans from the bank. People don’t need strict assessment of credit to get loans and the government has some policy like first home owners scheme to encourage house loans. As the interest rate is at the lowest point in history, any boost of the interest rate would cause hundreds of thousands of households under mortgage depress. In addition, the ease to get loans make more house demand, which eventually make the price going up. If people can only use their incomes to buy properties, the demand would definitely not as high as nowadays. The American house crash

The increasing homeownership rate in the United States is a worthwhile policy goal. The housing economy creates jobs for American citizens as well as brings down the competitive qualities to purchasing a home allowing more middleclass citizens to spend money on houses. In doing so this drives the overall economy up in the United States.

America’s 2008 recession brought on “falling home prices and tight credit; state- and local-government cuts; higher oil prices that stood in the way of economic growth (“Back from the,” 2012). The price of homes dropped significantly pushing the equilibrium price down resulting in a shortage and an increased demand for houses at lower rates. When this occurs, suppliers are motivated to start producing fewer homes until a new market equilibrium price and quantity are achieved. After America’s recovery in 2009, suppliers slowly began to produce more homes and since that time, house prices have gradually increased (“Back from the,” 2012).

Meanwhile, yearly house price inflation rates in the top 20 cities are running in line with the national trend. The cities with the highest rates of increase are Seattle (+12%), Portland (+10%) and Dallas (+9%). Lower tier property prices appear to be more volatile than their high end counterparts in both Seattle and Portland. Meanwhile, the three cities with the lowest rates of house price inflation are New York (+3%), Washington (+4%) and Cleveland (+5%). Furthermore, rising house prices appear to be having an adverse impact on affordability. According to the National Association of Realtors, rising prices are offsetting higher disposable incomes and stable mortgage rates, and affordability has consequently been declining since January 2015. Partly driving the increase in prices is a lack of available supply of existing single family homes for sale. The number of months’ of unsold inventory was just below 4 in March and availability has been gradually falling since 2014. Additionally, there is a relatively tight supply situation for new single family homes for sale, which is also helping to support prices.

Macroeconomics is an excellent tool for the analysis of the housing industry as something like a capital good, as a home is considered to be, cannot easily be studied in a short-term platform. Real estate is a good that costs several times more than an average persons annual income, in the United States that number is typically 7 times as much, and in the United Kingdom that number is 14 times as much. Several factors of both supply and demand directly impact the housing market on a macroeconomic scale. (Business Economics, 1)

The housing crisis in the late 2000’s was created in part from subprime loans that lenders gave to individuals that did not have to provide proof of income that they could afford the house. This was a disaster likely to repeat itself. If a person is hoping to buy a home, they will buy whatever the lender allows them to purchase even though it could be a financial stretch. Lenders, builders, sellers, appraisers, buyers, owners, and governmental policy makers are all still gambling with the economic future of both their buyers and the American economy as a whole.

For example, in May, June, and July there have been rising home prices combined with rising mortgage rates. This along with the fact that most jobs being created by employers are part-time low-wage jobs tends to indicate that there could be trouble in the ability of home buyers to afford to take out a mortgage for the purchase of a new home.

- London is one of the famous and expensive cities in the world which offers a lot of opportunities to people to elaborate on it. However, most of the people cannot afford its properties price and cost of living there. This report reviews/ discuss how house prices had been changed in the last six to ten years. A brief overview on average selling properties, number of properties sold in London, comparison between house prices in London and other cities in UK and how the percentage change, how BREXIT influence house prices and what these prices leads too. All in all, the solutions that the government made to solve these issues and some recommendation to the government to assist them more.

House prices only go up right? This has been the one certainty of the Australian economy over the last 25 years.

In this essay we will be discussing the social, political and economic changes that have increased housing debt within the UK in the last 30 years and recent years, to what extent has the debt difficulty caused to some families.

Housing demand includes household growth, real incomes, real wealth, tax concessions to both owner-occupied and rental housing, concessions to first homebuyers, returns on alternative investments, cost and availability of finance for housing and the institutional structure affecting housing finance provision (Yates, 2008). The growth in the number of households and in real income results in the increased pressure on housing demand.

In 1999 the market was relatively stable and there were equal amounts of buying and selling of property. However, the market began to improve and the housing market was going up in value. People began listing their homes in the new market in order to make the most profit. The market was in a steady increase from 1999 to 2006. Although, in 2006 the market reached its peak and began to crash. The rapid fall is shown between the time frame of 2006- 2008 and culminates in 2009 when the market crashed. The prices of homes drastically decreased so people no longer wanted to sell but because of bad loans people defaulted on their mortgages and had no choice but facing foreclosure. No one wanted to sell their homes since homes were overpriced and no one wanted to buy because of the problems with the

Volatility in the stock prices can impact on the cost of home ownership because of its relationship to mortgage interest rates. Although it isn’t the only factor that affects mortgage rates, other economic such as unemployment rate, inflation and the effect of demand and supply are still tied to the stock market in one way or the other. The reason for this is that stock prices are quite sensitive to economic uncertainties and subsequently sends a ripple effect of changes on other sectors including housing.

Declining price attract people with the easy loan facilities of their banks. And banks are ready with very high risk loans. This excess supply of home inventory placed significant downward pressure on prices. As prices declined, more homeowners were at risk of default and foreclosure. According to the S&P/Case-Shiller price index, by November 2007, average U.S. housing prices had fallen approximately 8% from their Q2 2006 peak and by May 2008 they had fallen 18.4%. The price decline in December 2007 versus the year-ago period was 10.4% and for May 2008 it was 15.8%. Housing prices are expected to continue declining until this inventory of surplus homes (excess supply) is reduced to more typical levels.