Shift in housing demand from rentals to ownership

Steps:

• Relaxation increases private house ownership, boosting demand for private houses.
• This replaces demand for state-rented apartments, reducing apartment demand.
• Higher demand for private houses raises their prices.
• Lower demand for apartments decreases their rents.

Why C is correct:

• Law of supply and demand: increased demand raises private house prices, while decreased demand lowers apartment rents.

Why the others are wrong:

• A: Private house prices increase, not decrease, due to higher demand.
• B: Private house prices increase, not decrease, from ownership surge.
• D: Apartment rents decrease, not increase, as demand shifts away.

Final answer: C