Microeconomics and property market - Term Paper Example

In ancient days however, when trade and commerce were still at their primitive stage, market competition was nearly absent and people distinguished the quality of goods according to the craftsmanship of the artisans. Property in those days mainly indicated physical commodities or tangible assets. But with the progress of civilization and the storm of globalisation sweeping over almost every nook and corner of the world, many transformations started taking place simultaneously. These transformations resulted to a renaissance of the social relations and some stringency in the rights of the people, including that of their ownership rights.

So, property got a new definition as well. With greater and greater competition seeping into the eventually liberating market structure, people started ruminating way-outs to protect their respective domains in order to stick back in the market competition. That was when the concept of intangible assets got introduced. Intangible assets imply those that do not have a physical existence but which can be legally owned by an entity. Hence today, the term ‘property’ actually implies tangible as well as intangible assets.

The present paper deals with the short-run equilibrium or the market clearing conditions in the property market today. In economic terms, short-run is the span when one or more factors are fixed, so that people have to operate in a more constrained framework. The present study aims to clarify how equilibrium is attained in the short run in the property market and how even a slight external disturbance is capable of shaking its very roots. Broadly speaking, property comprises of two kinds of assets – tangible and intangible.

However, a further dissection reveals that there are four main categories of the same, namely - stock of houses (for business or residential purpose), financial assets, developmental assets and