Key macro and micro factors influencing housing in Australia

Australians have placed a high degree of importance on home ownership,

which is perceived as important for the stability of family life and wealth of
creation. Over many decades the Australian government has been
encouraging home ownership through direct grants to first-time home buyers
(Plumb et al, (2010, p. 1), reserve bank of Australia).According to the
Australian bureau of statists in the housing departments around 70% of
Australians live in owner-occupied dwellings, and of these 50% own their own
properties without a mortgage or a loan. In conclusion around 25% of
Australians live in rented accommodations and more than 3 quarters of
Australians rent from private landlords (Mustafa 2014, p. 1, Australian bureau
of statics).Housing plays a strong role in regards to the social wellbeing of
Australians. Good housing has provided good social and economic
environment for society (Mustafa 2014, p. 1, Australian bureau of statics).
Factors influencing the housing market
Interest’s rates
These are the most important factors which affect housing and the property
market in Australia. The definition of interest rates according to investor
words is “a rate which is charged or paid for the use of money’. Interest rate
is calculated by dividing the amount of interest by the amount of the
principal. Interest rates in Australia change as a result of inflation and rates of
the reserve bank of Australia change. When interest rates are low the
demand for housing rises due to the bank being able to lend more people
money thus the housing market increases, however when the interest rate
rises the bank makes cuts towards the interest rates which means less profit
is made on each lo...

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...0.90% in December 1992 and also a record low of 4.00% in 2008. There has
been a decrease in unemployment yet a rapid increase in employment from
18,100 people being unemployed compared to 11,553,200 being employed
as shown in the graph below (lee 2014, p 1)