I wrote this article in October ,2007. Two years ago what was assumption , today it is down to earth.The name of the article /topics, which I am going to discuss article “ Zero supply to push Sydney rents sky high ” written by Richard Hemming published in daily news paper "The Australian Financial Review "on 10th May 2007. The article indicates that rents are increasing very rapidly in the Sydney market (CBD) over the next two years. Because the demand of office space in Sydney CBD is increasing very much , on the other hand the supply of office space is decreasing. About the scarcity of the renting space , the writer of the article highlights the statements of Mark Clapham senior director of CB Richard Ellis’s –“ It is the year we are calling the ‘Sydney gap ’ and we have not seen this before , where nothing is coming on in one year . We are expecting rents to grow at double –digits rates instead of low single –digit rates, which we have seen in the last three years. ” (The Australian Financial Review 10 may) .The article also indicates that this scarcity of supply of office space is diminishing not only in Sydney but also in Brisbane and Perth. This article has also published some important data to highlight the supply and demand of office space in Sydney CBD , how much the demand has increased and how much the supply has decreased in recent few years . About the future, the writer predicts that no commercial office renting place is supposed to come onto the Sydney CBD market place in 2009. So it is obvious that the main issue of this article is the supply and demand of commercial renting space in the Sydney CBD market, and analyzing the reason why the price is increasing so sky high. The writer has given us the answer. He claimed that the zero supply of commercial renting space is liable for increasing rent so high.
This article can be analyzed from the perspective of microeconomics. Because the main issue of this article is the supply and demand of commercial renting space in the Sydney CBD market .Moreover supply and demand are also the most important aspects of microeconomics.
So it is very obvious that supply and demand , these two phenomenon are closely related to microeconomics .They are the two most commonly used terms in economics. Their interaction widely affect economic variable of real life . This sort of reflection has been presented in the above mentioned article. If we discuss supply and demand and their interaction from the perspective of economic theory or models . Then it should be easy for us to understand why the rent of commercial office space has increased so rapidly in Sydney CBD. Supply and demand are the two most prominent economic event of microeconomics in real life. Without these two events, it is impossible to think about economics .On the other hand price and market these two important variables are also closely interacted with supply and demand. The interaction of supply and demand obviously brings the impact on the price and which is visible on the market. Now it should be better to discuss all the economic variable, supply, demand, price and market in order to explain the relationship between these variables and the above mentioned article. About all these variable the Stonecash ,Gans ,King and Mankiw( 2003, p 64)states “A market is a group of buyers and sellers of a particular good or service .The buyers as a group determine the demand for the product , and the sellers as a group determine the supply of the product ”. So it is obvious, market is one of the pre-requisite condition for supply and demand. The physical existence or nature of market can be different on depending on the nature supply and demand of goods. But it is expected in economics that markets should be competitive. Usually a competitive market indicates that there should be a lot of buyers and sellers in the market, so that impact on the price can be very less or negligible ( Stonecash, et al , 2003) . In the above mentioned article, the market is commercial renting space in Sydney CBD. In this market, the impact on the price of renting commercial space is very high. Because in this market the number of seller is less but the number of buyer are many. As a result it has made a serious impact on the price; price has grown up so high within few years.
We should justify the market of commercial renting space in Sydney CBD from the perspective of supply and demand. It is obvious that almost all of the economic events or variables are the interaction of these two events. Supply is one of the most important economic events. Supply indicates that the quantity of goods or the amount of services, that the manufacturers or producer can provide in the market for sale. The nature of supply can be in different sorts of, some of them can be goods or some of them can be services. The main issue of these topics is the supply of commercial rental office space in Sydney CBD. Now it can be discussed in this topics about implications of the economic law of supply in the supply of commercial rental office space in Sydney CBD , or how the consequences of law of supply has been reflected in this situation .
Economic theory of supply indicates that the supply of goods increases in the markets , because the price goes up in the market , on the other hand if the supply of goods decreases in the market , due to the decrease of price in the market On the other hand the theory of demand indicates that when the price of any goods goes up ,then the demand of that goods goes down and if the demand goes down then the price goes down as well. Different economic theories indicate that supply, demand and price all are closely interrelate with each other. Every market has got two most important aspects, they are supply and demand and their interaction determine the price of a goods in the market. The relationship the price of a goods and the quantity demanded is depicted by a graph which is known as demand curve, on the other hand the relationship between the price of a goods and the quantity supplied is depicted by a graph which is known as supply curve . With the help of these tools (demand curve and supply curve) the price rise of commercial renting space in Sydney CBD can be easily understood. It can be mentioned here the writer of the newspaper article has presented one graph in the article so that the readers can easily understand the main idea. Thus sometimes different sorts of graph are used to highlight economic variables. From the topics of newspaper we can understand about the supply and demand of commercial office space renting in Sydney CBD , all the statistics given in the newspaper article indicates that supply of office space has decreased tremendously , on the other hand demand of office space is increasing at large scale , as result it has made serious impact on the price and the price of renting space has gone up too much in recent few years.
This article can be analyzed from the perspective of microeconomics. Because the main issue of this article is the supply and demand of commercial renting space in the Sydney CBD market .Moreover supply and demand are also the most important aspects of microeconomics.
So it is very obvious that supply and demand , these two phenomenon are closely related to microeconomics .They are the two most commonly used terms in economics. Their interaction widely affect economic variable of real life . This sort of reflection has been presented in the above mentioned article. If we discuss supply and demand and their interaction from the perspective of economic theory or models . Then it should be easy for us to understand why the rent of commercial office space has increased so rapidly in Sydney CBD. Supply and demand are the two most prominent economic event of microeconomics in real life. Without these two events, it is impossible to think about economics .On the other hand price and market these two important variables are also closely interacted with supply and demand. The interaction of supply and demand obviously brings the impact on the price and which is visible on the market. Now it should be better to discuss all the economic variable, supply, demand, price and market in order to explain the relationship between these variables and the above mentioned article. About all these variable the Stonecash ,Gans ,King and Mankiw( 2003, p 64)states “A market is a group of buyers and sellers of a particular good or service .The buyers as a group determine the demand for the product , and the sellers as a group determine the supply of the product ”. So it is obvious, market is one of the pre-requisite condition for supply and demand. The physical existence or nature of market can be different on depending on the nature supply and demand of goods. But it is expected in economics that markets should be competitive. Usually a competitive market indicates that there should be a lot of buyers and sellers in the market, so that impact on the price can be very less or negligible ( Stonecash, et al , 2003) . In the above mentioned article, the market is commercial renting space in Sydney CBD. In this market, the impact on the price of renting commercial space is very high. Because in this market the number of seller is less but the number of buyer are many. As a result it has made a serious impact on the price; price has grown up so high within few years.
We should justify the market of commercial renting space in Sydney CBD from the perspective of supply and demand. It is obvious that almost all of the economic events or variables are the interaction of these two events. Supply is one of the most important economic events. Supply indicates that the quantity of goods or the amount of services, that the manufacturers or producer can provide in the market for sale. The nature of supply can be in different sorts of, some of them can be goods or some of them can be services. The main issue of these topics is the supply of commercial rental office space in Sydney CBD. Now it can be discussed in this topics about implications of the economic law of supply in the supply of commercial rental office space in Sydney CBD , or how the consequences of law of supply has been reflected in this situation .
Economic theory of supply indicates that the supply of goods increases in the markets , because the price goes up in the market , on the other hand if the supply of goods decreases in the market , due to the decrease of price in the market On the other hand the theory of demand indicates that when the price of any goods goes up ,then the demand of that goods goes down and if the demand goes down then the price goes down as well. Different economic theories indicate that supply, demand and price all are closely interrelate with each other. Every market has got two most important aspects, they are supply and demand and their interaction determine the price of a goods in the market. The relationship the price of a goods and the quantity demanded is depicted by a graph which is known as demand curve, on the other hand the relationship between the price of a goods and the quantity supplied is depicted by a graph which is known as supply curve . With the help of these tools (demand curve and supply curve) the price rise of commercial renting space in Sydney CBD can be easily understood. It can be mentioned here the writer of the newspaper article has presented one graph in the article so that the readers can easily understand the main idea. Thus sometimes different sorts of graph are used to highlight economic variables. From the topics of newspaper we can understand about the supply and demand of commercial office space renting in Sydney CBD , all the statistics given in the newspaper article indicates that supply of office space has decreased tremendously , on the other hand demand of office space is increasing at large scale , as result it has made serious impact on the price and the price of renting space has gone up too much in recent few years.
