The housing market plays an important role in the economy. Imagine you are employed by an international investment bank, which requires you to conduct a housing market research in the UK. The investor wants to know the information of the demand for and the supply of housing market in the UK, as well as the fluctuations of the price in the latest decade. In par-ticular, the investors require you to identify and analyse the main factors driving the fluctua-tions of the prices using equilibrium analysis. Moreover, data analysis and quantitative meth-ods can be applied to calculate various elasticities, such as price elasticity of demand, income elasticity of demand and price elasticity of supply. Hint: You may want to distinguish be-tween residential properties and buy-to-let properties.
Notes:
Your essay should draw on a range of sources not just the course materials. You should pri-marily utilise information from journals and other academic texts including textbooks and monographs. However, in order to obtain information suitable for the context described above you may also need to download and use relevant industry data from ONS website (https://www.ons.gov.uk/ons/taxonomy/index.html?nscl=Housing+Market). All sources of information used should be cited in the text and fully referenced at the end of your essay. In order to obtain good marks you will need to not only cover the relevant economic theory, but apply it in a critical manner to the context described above.
Learning Outcomes:
Apply consumer theory and producer theory.
Apply equilibrium analysis to a particular market.
Calculate elasticities based on raw price and quantity data.