ECON200: Applied Micro and Macroeconomics

Assessment 2: Individual/Group Research Essay

Course Code: ECON200

Assessment Type: Written Essay (Research)

Word Limit: 1,500 words (Group submission) OR 900 words (Individual submission)

Weighting: 20% of final grade

Assignment Context

The Australian housing market represents a critical intersection of broad national fiscal policies and localized supply constraints. Changes in the official cash rate, tax legislation, and population dynamics continually reshape market equilibrium. Students must apply theoretical models to real-world data, demonstrating a robust grasp of how both overarching macroeconomic levers and specific microeconomic behaviors influence property valuations and housing affordability.

Task Description

Write an essay directly addressing the following topic:

“An analysis of the key macro and micro economics factors which impact on the current Australian housing market.”

Discuss and relate the above topic to the theories, model data, or ideas introduced in the ECON200 curriculum. You must construct reasoned explanations and arguments based firmly upon economic analysis rather than merely rewriting business or financial journalism commentary. You are expected to integrate appropriate explanatory diagrams to substantiate your theoretical claims.

Formatting and Submission Requirements

Format Selection: Submit either a 900-word individual essay or a 1,500-word group essay.
Document Structure: Use standard academic formatting including a 12-point readable font, double spacing, and standard margins.
Cover Page: Include a formal cover page clearly stating the student name(s), student number(s), and tutorial time/room number.
Essay Architecture: Structure the essay with a clear Introduction, Body paragraphs detailing distinct macro and micro factors, a Conclusion, and a Reference List.
Referencing: Apply rigorous in-text referencing in either APA 7th Edition or Harvard format.
Parameters: Adhere strictly to the word limit. Words beyond the stated threshold will not be reviewed or marked. Extensions require extreme circumstances and must be requested prior to the due date. Late submissions without prior approval receive an automatic zero mark.

an economic supply and demand curve diagram, AI generated
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Marking Criteria (20% Total)

Your assessment will be evaluated against the following criteria:

Formatting and Presentation (2%): The response conforms to appropriate requirements of the specific format, including text size, line spacing, and a complete cover page with all required student and tutorial details.
Structural Integrity (3%): The essay demonstrates an appropriate academic structure, featuring a distinct Introduction, Body, Conclusion, Reference List, and accurate in-text referencing.
Theoretical Relevance (5%): The extent to which subject material covered in lectures and/or tutorials is effectively applied and relevant to the housing market topic.
Analytical Coherence and Depth (10%): The written work displays high-quality arguments, logical coherence, and a deep understanding of the topic. Marks are awarded for concise economic arguments, the use of appropriate explanatory diagrams, and reflections based on rigorous economic analysis rather than generalized commentary.

Sample Answer Pool Guide

Macroeconomic policy adjustments significantly dictate the trajectory of dwelling valuations across major Australian capital cities. The Reserve Bank of Australia manipulates the official cash rate to regulate inflation, which directly influences mortgage serviceability for retail consumers. Microeconomic variables like local zoning laws constrain the elasticity of housing supply and consequently elevate equilibrium prices in high-demand suburban corridors. Population growth fuels aggregate demand through persistent net overseas migration and natural demographic expansion. Consequently, structural undersupply intersects with robust household formation rates to sustain a long-term upward pressure on property values. Empirical models confirm that a sustained one percentage point increase in interest rates reduces real housing prices by approximately ten percent over a two-year horizon (Saunders & Tulip, 2019). Regulatory interventions must address both localized land-use restrictions and broader fiscal incentives to restore market equilibrium.

Academic Commentary & Market Context

Structural distortions within the Australian property sector stem from a complex interaction between negative gearing tax provisions and constrained land release pipelines. Demographic shifts following the pandemic have further fractured the market as remote work trends drove internal migration toward regional centers and fundamentally altered spatial demand profiles. Addressing the resulting affordability crisis requires a synchronized policy response that integrates federal monetary strategy with state-level planning reforms. Future economic resilience depends on cultivating sustainable housing frameworks that accommodate both population influxes and the changing financial realities of younger demographics.

Write a 900-word individual or 1,500-word group essay analyzing the key macro and microeconomic factors impacting the current Australian housing market for ECON200. In a 3 to 5-page paper, evaluate the macroeconomic and microeconomic variables shaping Australian property prices, utilizing appropriate economic models and data. Complete a comprehensive assessment of the Australian housing market by synthesizing macroeconomic policies and microeconomic supply constraints based on current economic data.

Recommended References

National Housing Finance and Investment Corporation (NHFIC). (2022). State of the Nation’s Housing 2022-23. Australian Government. https://www.housingaustralia.gov.au/sites/default/files/2023-04/State%20of%20the%20Nation%27s%20Housing%20Report%202022-23.pdf
Pawson, H., Martin, C., Aminpour, F., Gibb, K., & Foye, C. (2022). COVID-19: housing market impacts and housing policy responses an international review. AHURI Final Report No. 381, Australian Housing and Urban Research Institute Limited. https://doi.org/10.18408/ahuri-7124901
Saunders, T., & Tulip, P. (2019). A Model of the Australian Housing Market. RBA Research Discussion Paper No. 2019-01, Reserve Bank of Australia. https://www.rba.gov.au/publications/rdp/2019/2019-01.html
Simon, J., & Stone, A. (2024). The impact of recent macroeconomic shifts on Australian household balance sheets. RBA Bulletin. https://www.rba.gov.au/publications/bulletin/