Ultra-low interest rates are pushing up property prices, with figures showing the average home buyer could spend $41,000 more at auction that a year ago... With cheaper mortgage repayments, a borrower on an average income of $89,000 who has saved a 20 per cent deposit could have a budget of $806,250...A year ago, the same buyer would have had less borrowing power and a budget of only $765,000... Canstar group of executive of financial services Steve Mickenbecker said: 'It obviously does push house prices up. There's no question, people turn up with more money in their pockets, it means that demand is higher... Aside from low interest rates, Jellis Craig managing director Steven Abbott cites pent-up buyer demand after last year's lockdowns and extra cash on hand from cancelled international holiday plans...

a] (1 point) Use the demand/supply model to explain why low interest rates are likely to cause higher house prices.

b] (1 point) What other factor mentioned in the attachment might explain higher house prices?