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Assume you work as an economist at Ministry of Housing. Assume that following supply-side disruptions due to COVID-19 pandemic, construction materials (for example, steel and timber) prices go up around the world (including in Fiji). The Director Housing has asked you to prepare a short essay report that explains the various repercussions of higher construction materials prices. In your essay: a) Use a relevant diagram to show and discuss the impact of rising construction materials prices with the context of domestic property market. b) Examine the impact on: housing affordability; profitability of real estate companies; sales commissions earned by real estate agents. c) Discuss briefly two policy options to address some of the undesirable implications of higher construction materials prices.
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