Question

Explain the concepts of the housing market as a continuum, and explain why a subsidy at the low end of the market will have an impact on the high end of the market?

Answer 1

Subsidy at the low end of the market will have an impact on the high end of the market.How it impacts on high end of this market?

Lower end of the market housing means, the housing calculate rent according to the value of the area. Climate and facilities will be more in these areas. If people are having low income, they may not be able to afford high end of housing market.Because in the high end, rent is comparatively higher and lower income may not be able to afford this.At ths stage if the low income group get a subsidy,it wil really impact on the high end of the housing market. People always prefer to get housing in the high end of the market. Psychology of the individual is the most important reason for it.At the same time subsidy will support the lower income groups to achieve their dreams like getting housing in the high end area.

In near future due to the high demand of the high end market ,slowly low end market also become high end market. Inorder to achieve this level, subsidy plays an important role.