Question
I'm really struggling to answer the below questions as I cant seem to find the correlation with the link and the questions. Go to the
I'm really struggling to answer the below questions as I cant seem to find the correlation with the link and the questions.
Go to the link below and answer questions (a) - (d).
https://www.globalpropertyguide.com/Pacific/Australia/Price-History
(a)Find the graph that shows the impact of foreign investment on the level of 'Residential Real Estate Investment - Foreigners'. Briefly explain what happened to the level of foreign investment in residential real estate in Australia between the years 2013 - 2019.
The level of foreign investment of real estate in Australia grew quite a bit from 2013 to 2016 and then after 2016 to 2019 it started to plunge because of the Chinese buyer's investments. This is because China's internal domestic policy settings. Luckily the decline in Chinese investment was partly offset as there was a surge of North American buyers in Australia.
(b)How will the change since 2015/16, affect the Demand curve for housing in Australia?
(c)According to the Supply and Demand model, what impact should this change have on both the price and the quantity of sales of residential housing in Australia?
Price of residential housing
Quantity of sales of residential housing
(d)In the Supply and Demand model, it is always assumed that "other" factors do not change.Is it possible that the Demand for residential housing will NOT fall even if foreign investment decreases? Why or why not?
(e)As an application of Monetary Policy, the financial regulator APRA introduced stricter lending standards for residential Home Mortgage Loans in March 2017.Briefly explain why this would shift the Demand curve for Home Mortgage Loans.
If the financial regulator APRA introduced stricter lending standards for residential Home Mortgage Loans in March 2017, more consumers would be phased out owing to the strict compliance standards to be introduced. This would lead to a reduction in demand for the Home Mortgage Loans at any given price. Therefore, the demand curve for Home Mortgage Loans would shift to the left.
(f)In 2017, what would you expect to happen to the amount of Demand for Home Mortgage Loans in Australia when the Demand curve for Home Mortgage Loans shifts as a result of the stricter lending standards.
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