MIEC Project TS01 (Property) by Zhun Chen

More flat applicants benefit from housing policy changes: Lawrence Wong (Zhun Chen)

s10163813 — 2015-11-26 07:04:11 UTC

Sources: http://www.straitstimes.com/singapore/housing/more-flat-applicants-benefit-from-housing-policy-changes-lawrence-wong

From this article, it was announced that there was a change in Singapore's housing policy. Thus, this has benefited families and singles who were applying flats. The change in the policy which increased the income ceiling for applicants from $10,000 to $12,000 for families and from $5,000 to $6,000 for singles, has thus allowed more applicants to apply for flats in the future. Enhanced Special CPF Housing Grant, aimed at helping lower and middle income families has also granted around 6000 families to purchase flats. Apart from this, the new Two-Room Flexi Scheme which allowed the elderly to choose their apartment's lease, has been deemed encouraging as around 1400 elderly applied for the units offered in the current Build-To-Order exercise. November's Build-To-Order (BTO) exercise in Bidadari offers 12000 flats for their applicants. It has received the highest number of applicants as of now despite the high prices. Due to this overwhelming demand, Mr Lawrence Wong, Singapore's Development Minister, has announced that more units would be launched next year to keep up with the demand in Bidadari. He also added that flat supply would be changed in order to meet the demands accordingly. Therefore, I can infer that the demand curve for flats would shift right due to the high increase in the number of buyers which resulted increasing market demand.

UK houses price up (KangSheng)

s10163813 — 2015-11-26 07:23:07 UTC

From the article, UK house prices rose up by 3.9%, putting the cost of an average home to £196,807. With the increased demand for houses, prices of houses will continue to rise due to the lack of properties in the market as well as the shortage of houses being built. Due to this, the market is not in equilibrium. There is a shortage in the market, as the quantity demanded is greater than the quantity supplied. There will be an upward pressure on prices. To reach equilibrium, there must be an increase in houses in the market, which will make buyers buy less and less till the market is abck in equilibrium.

UK housing market (Joe Ray)

kangsheng0 — 2015-11-26 07:24:26 UTC

- To cope with the increasing demography, 250 000 houses are needed to be built each year.This figure is more than twice the average amount the UK government is building annually.Supply is increasing but, demand is increasing more than supply (2x the amount). If a D/S graph is drawn,supply curve will shift to the right and the demand curve will shift to the right, but at a larger margin compared to the shift in supply, which results in an increase in qty demanded and price.

- The theory that the price will increase has be proven by the article, which stated that prices have escalated and it is increasingly impossible to own a home.

- Not only has price of purchasing property increased, renting a property has increased too, most likely due to the former.

- Housing is a necessity to citizens and the production of necessities should at least be enough to sustain demand from citizens. However, the construction of new houses cannot/seem to be unable to be produced quickly (judging from the relatively low figures). As supply of houses is unable to substantially increase to cover the gap between it and demand immediately, at the moment, price would have to fall first, to at least more to afford homes.