Read the following short excerpt 'House prices rise with regional market outperforming capital cities, CoreLogic data shows' (Terzon 2021) and answer Question 6.

There has been intense speculation about Australians choosing to relocate regionally during the pandemic, as working from home arrangements make it easier for people to move away from big cities where major employers are typically based.

"People can have the best of both worlds and live in a marketplace with lifestyle benefits and lower prices, as well as commute back to big cities if they need to,' Mr. Lawless [CoreLogic research director] said.

While ABS population data out in November did show regional relocation trends during 2020, it also showed this trend had been happening in some locations pre-COVID. For instance, people leaving Melbourne for regional Victoria had already been trending up pre-2020, with capital city house prices from 2017 reflecting this.

- (Terzon, 4 January2021)

A.Using demand and supply analysis, and with the aid of a graph, explain how the fact that more Victorians are looking for a tree-change is affecting house prices and quantity in regional towns. Make sure you identify any important determinants of demand and/or supply, and identify any shortage or surplus and how this affects quantity. B.Prior to COVID-19, affordability of regional housing was already driving up house price growth. Using a graph and words, explain how affordability issues for houses in Melbourne were affecting house prices and quantity in regional towns. Make sure you identify any important determinants of demand and/or supply, and identify any shortage or surplus and how this affects quantity.

Contrast the two forces and explain why it may be important to understand the difference between them if you are a property developer.