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While economists believe a restrictive price ceiling reduces the supply of property to the market, I think there is some value in considering rent control in Australia. Rent control works effectively to ensure regular people aren’t squeezed out of cities where housing costs are soaring. Cities like Melbourne and Sydney. As house prices rise, more and more people will become lifetime renters. What are we doing to protect tenants though? Currently there are few – if any – controls to protect the many Australians who rent. Singles, families, older people.
First, present the theoretical model of a price ceiling in the market for rental properties using a correctly labelled supply and demand diagram. Explain the model. Pay attention to the supply and demand for rental properties in the market for rental properties when there is no price ceiling and when a price ceiling is present. (400 words) Then, discuss the efficiency and equity arguments surrounding rent controls in the form of a price ceiling. (400 words) Next, discuss Mousa’s comments above in the context of the theoretical model of a market for rental properties and the Australian property market. Include a statement of whether you agree or disagree with Mousa’s contention and reasons for this. (400 words) Note: Your Introduction and Conclusions should be about 100 words each.
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