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impact of an increase in the supply of housing on the relative price of housing and the flow of residential investment

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Explain the impact of an increase in the supply of housing on the relative price of housing and the flow of residential investment. Use diagrams in your answer.

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The impact of an increase in the supply of housing on the relative price of housing and the flow of residential investment is shown.

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The question is mainly looking at the impact a change in supply will have on price and secondly what this change in supply will mean to the market or the amount which is invested into the residential sector. Therefore it will be important to demonstrate your understanding of the causes of a change in supply, in this case an increase.

When there is an increase in supply, it usually means that there is more competition in the market. Therefore suppliers will not be able to charge high prices. Thus it is likely that as a result of an increase in the supply of ...

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