Affordable Housing Concept Essay

Research and debates leading to the causes of unpredictable prices as well as strategies that can be implemented. The notion of supply and demand as highlighted by Alfred Marshall and Thomas Malthus is essential in evaluating current and also proposed policies aimed at tackling the issue. There are two facets surrounding affordable housing in addition to Marshall and Malthus framework. Accessing housing facilities is essential in the process of evaluating living cost issues such as transport, food, clothing, healthcare and education. Easily accessible, reasonably priced and appropriate housing is moderated by the basic living standards (Stone 151-184). Rental affordability in Sydney is extremely high followed by Melbourne. Houses in Darwin and Canberra are more affordable while Hobart the most unaffordable place according to the market statistics Australian Bureau of Statistics). Australia’s residential properties dropped to 13.

billion US dollars according to a report released by the country’s Bureau of statistics on residential property price. The September, 2018 survey reported a 0. Comparing the domain price information and adjusted income data, change in price as well as median multiple in capital city market leads to respective peaks and accessibility is below (Owen). The Median multiples reflect the price of houses in cities such as Hobart and Canberra are still rising. The markets of houses in such places have not started to decline despite the wind of change sweeping across in most cities. According to the Domain Research, the property report of 2017, showed a decline of approximately 43,433 US dollars in the median. Therefore, the prices to income reduced to an income ration of close to 0. The percentage drops from 64. percent as compared to the 2017 report.

It will be a challenge for most people to service their mortgage loans (Owen). Apart from high population growth, the aggravate credit accessibility and also increase of housing demand is another factor that contributed to an increase in house prices in Australia. For instance, the Aussie Home Loans, a mortgage financial institution provides loan facilities to the locals. The prices go up if the demand increases and supply will also increase. In Australia, the supply of affordable new houses is still a major issue despite the market equilibrium law. The prices of most houses are unaffordable despite the demand exceeding supply (CoreLogic). Mismanagement from the government over urban structure all together with the labour shortage in the construction sector. The planning process of the government comprises of land availability, infrastructure costs leading to all constraints linked to delays and high expenses.

Thomas Malthus, the brainchild behind the principle of population states, an increase in population leads to an upsurge in the essential living costs such as food. The arithmetic growth of food production on a slow rate and puts people’s lives at risk of hunger and starvation. The demand for food is high while the supply very low leading to high cost of food. The innovation of Malthusianism elaborates on the effects of a stretching population growth (Malthus 2-9). Malthus further stated that unmonitored population growth would translate into effectuate famine through the depletion of resources, unemployment, overcrowding and increase pollution cases. Therefore, when the government intervenes, supports Adam Smith’s notion of free markets in the economy. Smith’s theories were based on observations in the 19th century and were applicable to the living conditions (Evensky 109-130).

On the other hand, Marshall focused on neoclassical economics. His theories tackled the microeconomics on the determination of goods, production and income distribution across the market courtesy of demand and supply. He further proposed a mathematical concept of equilibrium. Time has changed and the industrial revolution has swept across and his theories do not necessarily contribute to the much-needed solutions of basic needs which are defined by overpopulation and also finite resources. The population has increased to more than 10 times as compared to the time when Marshal introduced his theory. The population is still growing but still, food is produced and other basic needs. Technology innovation has led to food solutions and medical development which has countered diseases, conflict and famines. Also, his population countercheck strategies would still not be relevant since the growth in population has drastically increased and a drop will not solve some of the pending issues (Demsetz 653-672).

The government should hold on providing investors with grant facilities (Australian Bureau of Statistics). The housing’s supply limitation will pave way for an effective approach. He was a strong believer in the free market theory and the process plays out independently. Therefore, he would have described the Australian states as a result of restrictions on the housing market leading to a decrease in supply. Removal of restrictions would lead to natural equilibrium. Malthus rejected the move and proposed laws should be scrapped off and focus on a more sustainable ideology. He claimed the United Kingdom government focused on balancing the equilibrium an idea that was also supported by Marshall. He concurred with Malthus stating the government should not interfere with the programme but rather abolish the laws. Eliminating some of the laws go along way of creating a conducive business environment for the locals (Office of State Revenue).

Malthus and Marshall would have suggested, scrapping off the First Home Owners Grant to solve the housing crisis in Australia. The Australian government started tightening lending rates to investors which may eventual makes houses more affordable to the locals and the process will cut across all the cities. Works Cited Australian Bureau of Statistics. “Residential Property Price Indexes: Eight Capital Cities. Australian Bureau of Statistics. Jun 2018. au/housingaffordability. Accessed 12 October 2018. Chang, Charis. “The 10 steps needed to fix housing affordability. ” News. Economictheories. org. “Alfred Marshall the Problem with Time ~ Economic Theories,” (2013). economictheories. org/2008/08/alfred-marshall-problem-with-time. prres. net/papers/Karantonis_Population_Growth_and_Housing_Affordability. pdf. Accessed 13 October 2018. Malthus, Thomas Robert. Accessed 13 October 2018. Senate Economics References Committee. “Out of reach? The Australian housing affordability challenge. Stone, Michael E. “What is housing affordability? The case for the residual income approach.