rs, expectations of future prices, population and the price of related goods (substitutes). The determinants of supply can include resources/input of prices, technology, expectations and the number of suppliers.
             In applying economic theory relating to demand and supply, it is a change in the determinants that will result in a shift of each respective curve. The analysis will present what is typically happening to an established residential house and how this could affect demand and supply curves.
             Wages have continued to grow at a moderate level. Using quarterly percentage change estimates from May 2001 – May 2003 average weekly earnings for adults increased in each of the 12 months. These percentage changes were 5.6%, 5.5% and 6.7% respectively from May 2001 to May 2003. (ABS Cat No 6302.0)
             The increased level of income has improved the purchasing power of the individual thereby driving increased demand and causing a rightward shift in the demand curve for housing. Housing could be classed as a normal good.
             The change in the demand curve after an increase in income is illustrated in the following diagram.
             The statistics below indicate net interstate migration ( '000) for the State of Victoria as an example. There has been an obvious upward trend in population size which would influence the demand for housing. Banks have also pointed to soaring levels of net permanent arrivals into Australia since 1998 implying an implosion of demand. (The Age, August 12, 2003 – "Easy Loans Inflating Debt Bubble" According to Simon Tennent for the Housing Industry Association, improving economic conditions and sentiment in Victoria have drastically reduced the flow of population from that state to Queensland. (ABS Year Book 2002)
             Such an increase in population could also translate to an increase in the number of buyers for established houses thereby increasing demand and causing a rightward shift in the demand curv...