The relationship between inflation and real estate markets has become an increasingly common topic in IELTS Writing Task 2 examinations. Based on analysis of past exam questions from 2019-2023, this theme has appeared in various forms, particularly in questions about economic policies, housing markets, and investment strategies. Understanding how inflation impacts real estate investments is crucial for achieving a high band score.
Let’s examine one recent IELTS Task 2 question:
Some people believe that rising inflation leads to increased property prices, making it difficult for young people to buy their first home. What are the causes of this problem and what measures could be taken to solve it?
Analysis of the Question
This question requires a problem-solution approach, focusing on:
- Causes of property price increases due to inflation
- Solutions to help young people enter the property market
- Both macro and micro-economic perspectives
Economic analysis showing correlation between inflation and real estate prices
Sample Essay 1 (Band 8.0)
The correlation between inflation and soaring property prices has created significant challenges for young homebuyers in many countries. This essay will analyze the primary causes of this issue and propose potential solutions.
The main drivers behind this problem are multifaceted. Firstly, inflation typically leads to increased construction costs, including materials and labor, which directly impacts property prices. Furthermore, as discussed in studies about the importance of real estate in investments, real estate is often seen as a hedge against inflation, causing investors to purchase properties and drive up prices. Additionally, when inflation rises, central banks often respond by raising interest rates, making mortgages more expensive and monthly payments less affordable for first-time buyers.
Several measures could effectively address this challenge. Governments could implement targeted assistance programs for first-time homebuyers, such as subsidized down payments or tax incentives. Furthermore, local authorities could mandate that developers include a percentage of affordable housing in new projects. The impact of mortgage rates on housing demand could be mitigated through specialized mortgage products for young buyers with favorable terms.
In conclusion, while the relationship between inflation and property prices creates significant challenges, a combination of government intervention and market-based solutions could help young people achieve homeownership.
Sample Essay 2 (Band 6.5)
Nowadays, many young people cannot buy houses because of high prices caused by inflation. This essay will look at why this happens and what we can do about it.
There are several reasons why property prices go up with inflation. First, when prices go up everywhere, building materials and workers’ wages also increase, making houses more expensive to build. Second, rich people and companies buy many properties as investments, which makes prices go higher. Also, banks charge more interest on home loans when there is inflation, so monthly payments become too expensive for young buyers.
To solve this problem, governments can help in different ways. They can give money to help young people with their first house deposit. Also, they could make rules that some new houses must be sold at lower prices. Banks could also make special loans for young people with better interest rates.
In conclusion, inflation makes it hard for young people to buy houses, but governments and banks can help solve this problem.
Band Score Analysis
Band 8.0 Essay:
- Cohesive and well-organized structure
- Sophisticated vocabulary and complex sentence structures
- Clear topic sentences and well-developed supporting ideas
- Effective use of linking devices
- Academic tone throughout
Band 6.5 Essay:
- Basic organization with clear paragraphing
- Simple but clear vocabulary
- Some grammatical range but less sophisticated
- Basic linking words
- More informal tone in places
Key Vocabulary
- hedge against inflation (n.) /hɛdʒ əˈɡɛnst ɪnˈfleɪʃən/ – protection against the effects of inflation
- multifaceted (adj.) /ˌmʌltɪˈfæsɪtɪd/ – having many different aspects
- subsidized (adj.) /ˈsʌbsɪdaɪzd/ – supported with financial aid
- mandate (v.) /ˈmændeɪt/ – to officially require something
- mitigate (v.) /ˈmɪtɪɡeɪt/ – to make less severe
In future IELTS exams, candidates might encounter variations of this topic, such as questions about:
- The impact of economic policies on housing affordability
- Government intervention in property markets
- The relationship between interest rates and property prices
We encourage readers to practice writing their own essays on this topic and share them in the comments section for feedback and discussion.
