discuss 3 plausible factors leading to the double digit growth in house prices between years 2011...

discuss 3 plausible factors leading to the double digit growth in house prices between years 2011 to 2013 (max 450 words).
discuss the 2 strategies implemented by the government in 2012 to curb excess house price growth (max 300 words)

Expert Solution

House prices have increased tremendously between Years 2011 to 2013. The major factors are as :

Rise in the demand of Houses : Demand of houses have increased to a very large scale in the year. People had high inclination towards building houses as the economy was booming.
Population growth : There was a tremendous growth in the population from the year 2011 to 2013, leading to a consequent rise in the demand of Houses.
Lower rate of interest on Home Loans : Banks have come with attractive Home Loan offers where the Home Loans are available at a cheaper rates leading to many potential customers going for Home Loans and purchasing Houses. As a result the price of houses have increased.

Government has come up with various policies in 2012 to curb excess house price growth. These are as :

Putting an upper cap on House prices : Government has put an upper cap on House prices in order to control the excessive growth in the price of houses.
Increase in interest rate of Home Loans : Government has increased the interest rate on Home Loans in order to bring down the demand of Houses and thus the price of houses also came down.

Rahul Sunny answered 1 year ago

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