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Tuesday, August 01, 2006 here you go all you readers can have a read if you are too free. but i recommend a big no no. because it aint even for you people to read. it is for my friend to copy and paste into a word document in school and print. :)Task Requirement (1a): Identify the main factors influencing demand and supply for housing. The factors affecting the demand and supply of housing is somewhat similar to the factors affecting that of other industries. For example, the price of related goods, income, government policies and the composition of population affect demand while price of related goods affects supply as well. From Reference 1, the strong performance of the condominiums of the high-end market affects the demand for flats in the low-end market because they are substitutes in consumption. This means that they can be used in place of one another for the satisfaction of a similar want. From Reference 4, the robust economic growth in the past two years have lifted market confidence and increased demand. In conjunction with the economic growth, the government introduced pro-business policies to help the recovery in the property market. With economic growth, the income of working Singaporeans would increase and the quantity demanded of bungalows increased from 73 in 1999 to 90 in 2005. This implies that these prestigious bungalows are normal goods. From Reference 5, the resale of HDB flats to singles and permanent residents are opened with no resale levy imposed and the demand is expected to be high. From Reference 3, the price of unsold units in the market is dropping to 75 percent of its original price because developers are eager to get rid of them before new competition comes. This would lead to a decrease in quantity supplied to these units but increase in quantity supplied of brand-new luxury condominiums. This is because they are substitutes in production or in competitive supply. Task Requirement (1b): Account for the variation in prices of different housing. Before the discussion of the variation of prices, we first have to define the scope of the “different housing”. In the newspaper articles that we made reference to, they are namely public housing like Housing Development Board (HDB) flats and private housing like high end condominiums and good class bungalows (GCBs). According to Reference 5, HDB is hiring housing agents to market about 400 unsold flats on the resale market due to an oversupply about 5 years back. These agents could offer separate renovation loans and also free the buyers of the hassle of finding their own renovation contractors. This is why prices rise too, however not as much as the private housing. According to Reference 2, the price of private condominiums chugged steadily upwards for the 8th consecutive quarter. This is due to the growth in the high-end market continuing at full steam. In addition, prices for luxury homes were higher while the prices of resale flats barely budged. According to Reference 4, from 2004 to 2005, the land prices of top GCB addresses such as Bishopgate, Jervois and Cluny surged up 10 to 20 percent. Thus, the property price of such bungalow housing also increases reflecting an improving market. This is an early indicator of where the rest of the property market is heading. |
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Sean
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