1. Does the Australian housing market favour buyers or sellers in the Australian states and
Territories? Is the change widespread across Australia? Do individuals now have buying
power in the housing market, given the current tight household economic conditions?
Provide evidences and diagrams to support your answer.
2. Will decreasing house prices affect the supply of and demand for housing in Australia
and how will this impact price elasticity of demand for housing? Explain using diagrams
to support your answer.
3. Will the consumer’ welfare increase or decrease due to this change in the housing
market? Will there be a loss of welfare? Who would the change affect more? Will
offering subsidies or grants cause a change in supply and demand in the housing market,
irrespective of whether it is a buyers’ or a sellers’ market? Use appropriate diagrams
whilst explaining your answer.
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