LO2c Demand and Supply (Property Market) PDF

LO2 cont. Demand and Supply *[The specific case of the property market (particularly in Malta)]* Non-price determinants play a significant role in influencing the property market in Malta, as they can affect both demand and supply in various ways. Here are some key non-price determinants that impa...

LO2 cont. Demand and Supply *[The specific case of the property market (particularly in Malta)]* Non-price determinants play a significant role in influencing the property market in Malta, as they can affect both demand and supply in various ways. Here are some key non-price determinants that impact the property market: 1\. Economic Conditions: The overall economic health of Malta, including GDP growth, employment rates, and income levels, can influence demand for property. A strong economy typically leads to increased demand for housing, while economic downturns may reduce it. 2\. Demographics: Changes in population size, age distribution, and household composition can affect the types of properties in demand. For instance, an increase in young professionals may lead to higher demand for apartments, while an aging population might increase the need for retirement homes. 3\. Government Policies: Regulations, taxes, and incentives related to property ownership and development can significantly impact the market. For example, favourable tax policies for first-time buyers or incentives for developers can stimulate demand and supply. 4\. Interest Rates: While technically a price factor, the broader context of interest rates can influence buyer behaviour. Lower interest rates can make borrowing more attractive, increasing demand for property, while higher rates may deter potential buyers. 5\. Cultural Factors: Local customs and lifestyle preferences can shape the types of properties that are in demand. For example, a preference for traditional Maltese architecture may influence the market for certain types of homes. 6\. Infrastructure Development: Improvements in transportation, utilities, and public services can enhance property values and attract buyers to certain areas. For instance, new roads or public transport links can make previously less desirable locations more attractive. 7\. Tourism Trends: As a popular tourist destination, fluctuations in tourism can impact the property market, particularly in areas catering to short-term rentals. A rise in tourism can increase demand for vacation properties. 8\. Environmental Factors: Malta\'s unique geography and climate can influence property desirability. Areas with scenic views or proximity to the coast may see higher demand, while concerns about climate change and sustainability can also affect buyer preferences. In summary, non-price determinants such as economic conditions, demographics, government policies, cultural factors, infrastructure development, tourism trends, and environmental considerations all play crucial roles in shaping the property market in Malta. Understanding these factors can provide valuable insights for potential buyers, investors, and policy makers. He specific case of property markets, particularly in Malta. The above-mentioned factors influence both the demand and the supply of property in Malta. You must keep in mind that this type of market is not a uniform one, the market is subdivided into the market for houses, apartments, commercial premises and also the rental market. The non price determinants mentioned above may influence either demand or supply and at times even both. It is also important to understand the PED and the PES in the property market are also influenced by several factors. These in turn have their respective impact on equilibrium price and equilibrium quantity.