The rise of real estate prices associated with the increasing number of homeless citizens in Australia is a matter of concern for the people dwelling in the country. Australia has witnessed a significant rise in price of real estate in the recent years which can be the attributed to several factors like the increasing demand of property by foreign buyers in Australia who are willing to invest an exorbitant amount of money in real estate of the country (Forrest 2013). Australia is a nation which has witnessed an increase in the growth of immigrants in recent years. Immigrants visit the country for a number of purposes, for instance, Australia is the home to a large number of universities of international repute. Students migrate to the country both for their under graduation and post-graduation studies. Australia is the center for business and many multi-national companies have their offices in the country, resulting in an increase in number of immigrants who visit and stay in the country for the purpose of work and their companies sponsor work visa for them. These immigrants often stay in Australia with their families who are supported by a dependant visa. All these factors lead to an increase in demand of property in Australia which leads to a significant increase of price of real estate in Australia. The upsurge in the price of real estate is the cause of increasing number of homeless citizens in Australia .The issue affects all section of the society but the section of the society which is affected the most is the Australian youth. The youth of the country have to often support their own education and they have to stay away from families in different cities for the purpose of study or work. They have to search for property away from their home and sometimes they search for properties on rent. The exorbitant price of property leads to their homelessness (Gauder, Houssard and Orsmond 2014).
The research on this topic will help to gain insights on the following research questions
1) What are the probable causes of the increase in real estate price?
2) Which parts of Australia have witnessed a stiff increase in price of property resulting in homelessness of the Australian citizens?
3) How the lives of the people who are homeless are impacted? What is the future implication of this?
4) What is the role of government to control price of property?
The secondary data collected on this research topic is collected. Social media like Facebook and Twitter are used for data collection.
Data of Secondary research –
1) According to Australian Bureau of Statistics, price of real estate has increased by 4.65% in eight major cities of Australia in the year 2016. This rise in price is lower as compared to a rise of 10.53% in the year 2015(Paull et al 2015).
2) Residential properties in Melbourne have shown an increase of 8.2% in the year 2016. Canberra is the second city which experienced a sharp increase of real estate price, the price rose by 6% in the year 2016 and projected a double digit growth in 2017(Tsai et al 2017).
3) The mean price of real estate property in Australia especially residential properties in Australia was AU$623,000 in the year 2016 (theaustralian.com.au/ 2017).
4) New South Wales especially Sydney has experienced the most expensive real estate price, the mean price of real estate housing properties was AU$880,000. This price is 30% above the national mean house price (Minnery and Greenhalgh 2007).
5) Tasmania has the cheapest real estate price, the mean price being AU$320,000 in the year 2017.
6) The market of real estate in Australia is overvalued by 10% According to International Monetary Fund (IMF) and Global Real Estate Bubble Index published by the investment Bank UBS in the year 2015, real estate price in Sydney ranks in bubble risk category with exorbitant pricing of housing and residential properties ( theguardian.com/australia-news/2017).
The rise in price of real estate can be attributed to a number of factors like the increase in demand of the real estate price especially an increase in foreign investment. There is an increasing demand of new residential properties. The purchase of established real estate rose to 422,765 units in the year 2016 and the purchase of new real estate rose to 23,267 units in the same year. This is more than 5 % increase as compared to the year 2015 (theguardian.com/australia-news/2017).
Based on the research of number of journal articles, homelessness can be described as a condition where people do not have a place like apartment or house for permanent dwelling. Homelessness has severe impact on an individual. According to Maslow’s hierarchy of needs, the base of Maslow’s pyramid comprises of the basic needs of an individual, which are needs for shelter and the need for safety and security .Homelessness can impact an individual by depriving him of basic needs of safety and security. A permanent residence can have a positive psychological impact on an individual because a legal home can satiate his basic need for survival and can boost him with an inner sense of safety and protection (Martin 2014). On the contrary, homelessness can adversely affect an individual’s physical and emotional well being. When an individual can’t afford to buy a property in his country of residence, it will have an impact on his emotional well being (Beard 2012). The inability to fulfill lower degree needs will hamper the individual’s potential to achieve higher degree needs of self-fulfillment and self-achievement. Homelessness can adversely affect an individual’s social behavior (Zufferey 2014). The feeling of insecurity can make him behave irrationally in a social circle often demonstrating fear, anger, restlessness and worry .These negative emotions can make an individual isolated with limited social groups. Homelessness can adversely affect the profession- work or studies of an individual. Homelessness will affect the physical health of an individual. With no place to rest at night, an individual can have poor health and nutrition and can be deprived of adequate sleep (Milbourne and Cloke 2013). In Australia, the increase in number of homeless individuals in recent years can be attributed to the increase in the price of real estate. The increase in homelessness is severe in major cities like Sydney, Melbourne and Perth. The government of Australia should take significant measures to make the real estate price affordable. The effort of the government and other regulatory bodies can bring down the price of real estate and thus there can be a decrease in number of homeless people in Australia. The increase in the price of real estate can be partially attributed to increase in investment in real estate from foreign buyers in the country. People from foreign countries like China accounted for more than twenty percentage purchase of property annually. Taxes like stamp duty surcharge can be introduced by the government to make the housing price affordable for Australian citizens. Lending standards can also be tightened by banks so that demand of real estate in Australia by foreigners is weakened. The increase in price of property can be attributed to the increase of population in Australia. The size of family has shrink in Australia, however there has been an increase in immigration rates. The increase in immigration in Australia in past can be attributed to the government’s favorable rules for immigration to boost the Australian economy. The universities in Australia have welcomed students from all over the world (Mulley 2012).The students have migrated in major cities in Australia for their undergraduate and post-graduate studies and later managed to get their employment sponsored. The Australian economy was also boosted by the increase in the growth of corporate offices of multinational companies in the country. Globalization also favored these big multinational corporations like Tata Consultancy Services to hire workers from their home country and provide them with work permit of Australia to reduce cost. These factors have increased the demand for housing properties in Australia resulting in the increase in homelessness and housing affordability in major cities like Sydney (Pandit et al 2013).
There are evidences in the social media citing the steep increase in price of property especially in major cities like Sydney and Melbourne (Crowe et al 2013). The peak body for homeless sector in Australia is Homelessness Australia. This body has twitted the rising concern of homelessness in Australia. There has been evidence from social media platforms that there has been a slowdown in the construction of real estate in the country. There has been evidence of weak construction of residential properties in Western Australia. The plights of the Australian homeless citizens are evident from their tweets and discussions in social media platforms like Facebook. There has been a decrease in social housing which is offered by the Government. It is evident from social media discussions that the real reason of people dwelling in the streets of major cities in Australia is homelessness and not alcohol consumption or mental illness (Flatau et al 2013).The purchasing power of housing in Australia by the citizens has steeply declined in cities like Sydney and Melbourne. The state of homelessness has negatively impacted the psychological states of the citizens of the country. People have failed to provide a safe and protected life for their family members. This negatively impacted the health and nutrition of the family members. The homelessness can also be contributed due to failed efforts of rental assistance by the government of the country .There has been an increase in weekly and monthly rents of housing properties in major cities like Sydney and Melbourne. Increase in rent can be attributed to the increase in number of people working on temporary visa in Australia. This section of the society comprising of students and temporary workers generally do not invest on purchasing properties but pay rents for home. The rental prices have shown a steep rise resulting in homelessness, however the government has intervened recently to improve the situation and kept home lone lower to make housing affordable (Walsh and Gatley 2012).
The findings are about the causes of homelessness in Australia, the cause of increase in price of property in major metropolitan cities of Australia as well as the steps taken by the Australian government to make housing more affordable. Three themes of findings have been discussed in the table below and theories in support of the findings are provided in the table.
|
Theme 1 –Mortgage Market in Australia has shown a value of 97% of GDP in the year 2016, variable interest rates for housing loans has been as low as 5.45 % in the year 2015 and 2016(Baum and Crosby 2014). |
This finding is about the government has kept interest rates low to make housing affordable for Australians who plan to buy homes for living. However the lending rates provided by banks for foreign investors are kept higher than local Australians to make the housing affordable. |
|
Theme-2- Residential construction in Australia has weakened with a decrease in number and value by 5.4% and 0.1 % respectively(Gurran and Phibbs 2013). |
The construction of residential properties fell due to decrease in land acquisition. There has been an increase in construction cycle of sky-high apartment (McDonald 2014). However, it is expected that this fall will demonstrate a steady value in the year 2017 and 2018. |
|
Theme 3- Housing affordability has decreased in Australia especially in Sydney |
Sydney and Melbourne are metropolitan cities and with a stiff demand for residential properties (Holst 2017). Immigrants in these cities are high as well as tendency for investment in residential properties by foreign investors especially Chinese investors in these cities are high (Kuttner and Shim 2016). |
|
Theme 4 –Price of Australian property has hit a seven year record high in the year 2017, the value of real estate surged to 1.4 % across Australia, annual growth of price was pushed to 19% in Sydney and 16% in Melbourne .Canberra also projected a double digit growth in price of property which was projected to be 12.8%( theguardian.com/australia-news/2017/). |
The lending prices on interest only and investors loan was not tightened well by banks in Australia boosting investment on housing properties by foreign investors and thus increasing the concern of homelessness among Australian citizens. The nation that topped in investment of Australian properties was China. |
This discussion is about the theory related to the four themes and the conclusion drawn on them
Theme 1-The existing theme says that mortgage market in Australia and interest rates of banks have been low in recent years.
Theory of Theme 1-These are the steps taken by the Australian government and banks to make hosing affordable. These policies will have a negative impact on the concern of homelessness. People of the country will be to purchase residential properties which will boost their sense of security. Purchasing power of citizens of Australia will increase and they will be keen on buying residential properties when interest rates provided by banks are low. This low interest rate will boost investment in the purchase of residential properties by local Australians even in cities like Sydney and Melbourne which demonstrates a high rise in price of real estate This policy will enable Australians to dwell in metropolitan cities and they will not have to accommodate themselves in suburban .Dwelling in suburban areas can adversely impact personal and professional growth of Australians due to lower opportunities of job and poor growth of business in these areas. The residents of suburban areas suffer from unemployment and lower productivity which can be detrimental to the overall economic growth of Australia.
Recommendations- Thus support from Government and banks is necessary to make housing affordable for local citizens. However, the foreign investment by nations like China in real estate of Australia should be weakened and thus interest rates and schemes and policies for foreign investors should be strict so that housing prices are affordable for Australian citizens.
Theme 2-The existing theme says that residential construction in Australia has weakened both in value and number
Theory Behind Theme 2-The funding available for social housing projects was not enough resulting in poor construction of residential properties and there has been trouble in land acquisition .The Australian government should boost social housing projects. It can be predicted that the construction of residential properties can be steady in the year 2017 and 2018 in sharp contrast to the low value of 2016(Garwood 2012). The sky rising apartments in metropolitan cities of Australia takes almost 3 years to complete construction and involve huge number of labors. The cycle time for these properties can be more and labor involved in the construction of these properties can be stuck and can’t be involved in the construction of other residential properties
Recommendation -However, the increase in demand of residential properties in the country and lower mortgage rates and lending rates by major banks in Australia can make the residential construction steady in the country in recent the year 2017 and 2018.
Theme 3-The existing theme says that housing affordability has lowered in major cities of Australia especially in Sydney and Melbourne.
Theory Behind Theme 3- The metropolitan cities of Australia are highly developed with world class amenities like universities and educational institutions of international repute. Students from all over the world migrate to the major metropolitan cities of Australia especially Sydney and Melbourne to fetch their undergraduate and post graduate degree which can help them boost their career. These students often seek residential properties on rent which has an impact on overall increase in demand for real estate market in Sydney and Melbourne especially residential properties. Also real estate in the major cities experience occupation of land by other business centers like office spaces, recreational hubs like restaurants, pubs , spas ,wellness centers and gyms(Corones 2014).Thus availability of land for construction of residential properties in cities like Sydney and Australia is low and thus there is an increase in demand of residential properties in these cities .Also, the cities of Sydney and Melbourne are business hubs and center for office of major multinational companies. Thus, these cities show an increase in number of immigrants which include workers on temporary visa as well as their families on dependant visa. Thus the immigrants contribute to the high demand in residential properties in cities like Sydney and Melbourne resulting in homelessness of local Australians (Seetaram 2012).
Theme 4-The increase in property price in the major cities of Australia, primarily in Sydney and Melbourne is due to several factors like the state governments of the country has imposed several restrictions on the supply of land.
Theory Behind Theme 4- The homelessness in the cities of Australia is thus a concern which is not addressed well by regulatory authorities like the Australian government and the banks in Australia .It is evident from the data in Theme 4 that the property price has reached even double digit growth in Canberra which has made it extremely difficult for Australians to purchase property in this city. Sydney and Melbourne also projected rise in property price in 2017 as compared to 2016. These data clearly reflects the fact that the concern for homelessness remains unaddressed and the banks in the country fails to tighten the lending rates resulting in increasing demand and investment.
The first recommendation is that lending rates should be tightened by banks and credits should be available for the local Australian citizens so that they can buy residential properties. The Foreign Investment Board of Australia should intervene in the investment on Australian property by foreign nationals. The investment from foreign nations in Australian real estate can boost the economy of the country. However this increased the demand of property in the metropolitan cities of the country making housing prices unaffordable for Australians resulting in homelessness in the country. Intervention from Foreign Investment Board is mandatory in this regard and approval from the Board should be made compulsory for the purchase of properties.
2) The State Government should not have restrictive laws regarding land acquisition. The construction of real estate properties especially residential properties have slowed down due to the restrictive laws of the State government. The land should be made easily available and approval for construction of residential buildings should be permitted. Construction should match the demand for residential properties so that the prices of the real estate are under control and can be made affordable for the Australians so that the issue of homelessness can be addressed easily. The underutilized lands should be used for the construction of properties in the country and the transfer of ownership of public housing from state government should be given to community housing providers. This will make the housing prices affordable by the Australian citizens.
3) The Government should tighten laws related to immigration and obtaining of permanent residency in the country. Australia is already populated with immigrants from all over the world. Though some of the highly skilled and talented the immigrants can contribute greatly to boost the Australian economy but the country should take measures to control the number of immigrants in the country to address the concern of homelessness.
Conclusion
The price of real estate should be controlled immediately in Australia to address the concern of homelessness. It is evident from the data obtained in 2017 that property prices have continued to reach a record high in last 7 years. This data has thrown light on the fact that the regulatory bodies in Australia like banks and the Government has not been successful in their endeavors to control property prices in the major cities of Australia. The intervention of Government, regulatory bodies and banks are mandatory to address the concern of homelessness.
Reference Lists
Baum, A.E. and Crosby, N., 2014. Property investment appraisal. John Wiley & Sons.
Chamberlain, C. and Johnson, G., 2013. Pathways into adult homelessness. Journal of Sociology, 49(1), pp.60-77.
Corones, S.G., 2014. Competition law in Australia. Thomson Reuters Australia, Limited.
Crowe, C., Dell’Ariccia, G., Igan, D. and Rabanal, P., 2013. How to deal with real estate booms: Lessons from country experiences. Journal of Financial Stability, 9(3), pp.300-319.
Fazel, S., Geddes, J.R. and Kushel, M., 2014. The health of homeless people in high-income countries: descriptive epidemiology, health consequences, and clinical and policy recommendations. The Lancet, 384(9953), pp.1529-1540.
Forrest, R., 2013. Housing and family wealth. Routledge.
Garwood, S., 2012. Perth metropolitan homeless response workshop: Developing a coordinated approach among local governments, law enforcement, government agencies and service providers. Parity, 25(9), p.70.
Gauder, M., Houssard, C. and Orsmond, D., 2014. Foreign investment in residential real estate. RBA Bulletin, June, pp.11-18.
Gurran, N. and Phibbs, P., 2013. Housing supply and urban planning reform: The recent Australian experience, 2003–2012. International Journal of Housing Policy, 13(4), pp.381-407.
Holst, H., 2017. Homelessness in Melbourne. Planning News, 43(3), p.8.
Kuttner, K.N. and Shim, I., 2016. Can non-interest rate policies stabilize housing markets? Evidence from a panel of 57 economies. Journal of Financial Stability, 26, pp.31-44.
Martin, R., 2014. Gender and homelessness. In Homelessness In Australia(pp. 100-116). NewSouth Publishing, University of New South Wales Press Ltd.
McDonald, S., 2014. Social partnerships addressing affordable housing and homelessness in Australia. International Journal of Housing Markets and Analysis, 7(2), pp.218-232.
Milbourne, P. and Cloke, P.J. eds., 2013. International perspectives on rural homelessness. Routledge.
Mulley, R., 2012. Perth registry week 2012: Challenges, collaboration and looking forward. Parity, 25(9), p.22.
Parsell, C. and Parsell, M., 2012. Homelessness as a Choice. Housing, Theory and Society, 29(4), pp.420-434.
Paull, M., Clear, A., Kestel, J.A. and Paulin, S., 2015. Exploring the influence of Homeless Connect Perth on personal agency. Third Sector Review, 21(1), p.79.
Seetaram, N., 2012. Immigration and international inbound tourism: Empirical evidence from Australia. Tourism Management, 33(6), pp.1535-1543.
Theaustralian.com.au/. 2017 Property price. [online] Available at: https://www.theaustralian.com.au/news/inquirer/heated-house-market-hits-a-ceiling-in-sydney-and-melbourne/news-story/08a7b3f7cdb2feecfbcb15dd82746358 [Accessed 5 Sep. 2017].
Theguardian.com/australia-news/2017/. 2017. Guardian. [online] Available at: https://www.theguardian.com/australia-news/2017/apr/03/sydney-property-prices-rise-almost-20-in-past-12-months [Accessed 5 Sep. 2017].
Tsai, C.H.P., Mulley, C., Burke, M. and Yen, B., 2017. Exploring property value effects of ferry terminals: Evidence from Brisbane, Australia.
Walsh, .K. and Gatley, J., 2012 Building on progress made under the national partnership agreement on homelessness. Parity, 25(8), p.33.
Zufferey, C., 2014. Questioning representations of homelessness in the Australian print media. Australian Social Work, 67(4), pp.525-536.
Essay Writing Service Features
Our Experience
No matter how complex your assignment is, we can find the right professional for your specific task. Contact Essay is an essay writing company that hires only the smartest minds to help you with your projects. Our expertise allows us to provide students with high-quality academic writing, editing & proofreading services.
Free Features
Free revision policy
$10Free bibliography & reference
$8Free title page
$8Free formatting
$8How Our Essay Writing Service Works
First, you will need to complete an order form. It's not difficult but, in case there is anything you find not to be clear, you may always call us so that we can guide you through it. On the order form, you will need to include some basic information concerning your order: subject, topic, number of pages, etc. We also encourage our clients to upload any relevant information or sources that will help.
Complete the order form
Once we have all the information and instructions that we need, we select the most suitable writer for your assignment. While everything seems to be clear, the writer, who has complete knowledge of the subject, may need clarification from you. It is at that point that you would receive a call or email from us.
Writer’s assignment
As soon as the writer has finished, it will be delivered both to the website and to your email address so that you will not miss it. If your deadline is close at hand, we will place a call to you to make sure that you receive the paper on time.
Completing the order and download