The purchase of house in Sydney has become one of the important issues in Australia. For this reason the former governor of Reserve Bank of Australia, Mr. Glenn Stevens had warned home buyers never to obtain the higher debt required to purchase property in the overpriced current Sydney property market (Chappell and Campbell 2018). Since the Sydney property market is overvalued, the home purchaser will be negatively impacted in the future; therefore individuals should informed on this.
The house costs in Sydney has risen exponentially in light of the fact that International investor, particularly from China. These international financial specialists are pulled in to Australia by the Australian Investor visa. The critical Investor visa draws in noticeable speculators and agents to Australia and increment development and monetary development. (Nicholls and Macken 2014).
The Australian dream of many people owning the houses has motivated a number of people in purchasing of the houses and this created some effect in the price of houses interns of the cost. The effect has become one of the life style and has been contributed by a number of factors (Gillon and Gibson 2018).Education and life stys are considered as some of the key factors to this effect. The high prices of homes more so in towns has made a number of low income earners not able to purchase or some are rendered homeless.( Johnstone 2014).This challenge which has affected a number of low income earners is likely to be solved by the federal banks. The banks are promising to bring hope back to the citizens; and also to finance the low income eaters by granting them loans to purchase homes (Hutchens 2014).
Rising in state capital house costs could impact variety of stakeholders together with home owners, local investor, foreign investors, 1st home buyer and therefore the Australian government (Knoll, Schularick and Steger 2017). Home owners ought to increase the standard of their homes and build them in numerous subject styles to draw in home consumers. Additionally, the fast increase in state capital house costs can compel home owners to think about building sorts of big houses suited for investment and residential purposes (Macken 2014).
In conclusion, it is believed that the property prices in Sydney will rise continuously in the shorter term. However a more aggressive approach by the government utilizing various controls will ease the pressure on the long term. The outlook is not very supportive to potential first home buyers as the government policy may ease the pressure somewhat but will not have a major impact on the demand and supply (Taylor,Stevens, Agho and Raphael 2017). Some of the government policies such as negative gearing and allowing foreign investors to purchase Sydney properties is a major deterrent in easing the property price pressure in Sydney. The availability of high rental income to residential investors has also made it very attractive to get into Sydney property market.
Sydney has been regarded as cosmopolitan city. The city has different people living in it. Some of them are considered to have migrated from the overseas and some within the country itself (Kohler and Van Der Merwe 2015). The effect of its cosmopolitan has resulted to the increase in population. Sydney City has been considered as a business centre for Australia and for this reason a number of the citizens do migrate to seek for job and looking for other green pastures. It is also considered as an educational and health centres where many hospitals and universities are situated within its centre (MacDonald et.al 2016).
Because of its lucrative in nature, the living standard in Sydney has been very and price of houses compared to the general income of the residents. Since Sydney is unable to cope with such challenges the price of houses keeps rising. The government had been trying to overcome this rising pressure through the provision of some incentives such as offering of the homes subsidy and other offers (Cook, Davison and Crabtree 2016). The incentives has been very helpful because most of the first timers are able to purchase homes at cheaper prices.
The Mortgage challenges is also one of the factors that has affected the citizens living the city .This is one of the ways that had opened the way to the housing ownership. Out of this the interest that is offered has become affordable and a number of fresh owners has been very successful on this in terms of house ownership (Gurran and Phibbs 2015). A number of incentives had been very crucial when comes to the house ownership. One of the greatest factor is the reduction in the taxation rate to the first timers. This is characterized by the negative gearing which is experienced in the taxation system.
All these has become some of the factors that have attracted a number of people to own houses in the Sydney. The motivation had been geared by the motivation from the international investors from both China and other parts of the world (Rogers, Lee and Yan 2015). The offering of the incentives by the Australian government and other financial institutions have boosted the department of housing interns of the house ownership and pricing. This is one of the reasons behind the rising in demand by first timers.
The main purpose of this research is to investigate the negative effect or the challenges faced by the company in perusing the strategy. Some of the research questions are as follows:
Aims
Objectives
The main objective of the research is to investigate the requirements and challenges that affect the first time house owners in the Australia.
Questions
The above question will help to answer the main motive of the research.
The introduction part of the report involves the analysis on the prices in Sydney in terms of ownership and the pricing. The report then follows by the description of major role players who are mostly affected by the impact on the change of price of the houses. The research also explains the challenges associated with the pricing of houses in Sydney in terms of the ownership and the demand due to the economic atmosphere of the country. The last part talks about the budget and time scheduling of the research and the financial requirements.
From the study is believed that the RBA policy is a major player impacting the Sydney house prices, as this is widely projected in Australian media. The Reserve Bank cash rate being at the lowest at all times also has given rise to people getting into housing market.
The writer believes the RBA policy is a major player impacting the Sydney house prices, as this is widely projected in Australian media. The Reserve Bank cash rate being at the lowest at all times also has given rise to people getting into housing market.
There are different data methodologies that have been employed in the whole research for the quality project.
Literature review-The deepness of the study of the project utilizes a number literature reviews to come up with different information on the housing policy in Sydney. Some of the sources of information include: source from the Google the reviewed literature, literature from the libraries. The information is also received from other books that talk about the home market of Sydney. All these sources of information are considered to be useful for the project. A number of journals is very useful since they provide different information on the same matter of the study.
Group focus – The information gathered from different sources of literature provide a good platform for the research. The use of qualitative approach helps in analysing the details of the socioeconomic issues of the Sydney housing .This forms part of the population focus of the study.
The Data Collection method: The variety of the data obtained from different journals will help in the analysis of the government policies concerning the market policy. It also helps in the analysis of the housing demand and economic issues.
Method of data Analysis: The project will use different data analysis method in finding the quality. Different approaches such as quantitative and qualitative techniques shall be applied. The information to be used for analysis shall be obtained from different journals and literature materials.
Chapter 2: The identification and statement from the problem.
Chapter 3: The Hypotheses and conceptual framework of the project.
Chapter 4: Outlines the methodologies used for the study and sources of these information and related literature sources.
Chapter 5: Talks about the findings of the research report.
Chapter 6: Summarizes the project and al the impacts related to the price of the house and economic issues.
Housing has become one of the basic need in Australia. Everybody is willing to own a houses but they are not aware on some of the challenges associated to this issue. Therefore the conceptual framework provides the factors that affect housing affordability for people dwelling in Sydney. Also, looking at population growth, wages & income growth; release of land for affordable housing development, and the role of government on easing the affordability housing crisis. The following information gives the challenges that are experienced by the individual citizens concerning the housing policy and the expected solution to the challenges.
Demand And supply: Demand of Australian houses is inflated by the skyrocketing house price in Sydney, making it virtually impossible for public looking to get into their first home. The supply of affordable housing has declined as government release of land for housing projects has been stagnant. Although houses at the outer suburbs of Sydney are more affordable, however most of the employment is held closer to Sydney CBD making it difficult for commuting.
Borrowing Capacity: Sydney also has a very high cost to income ratio while the average Australian income is $90,000; the house average house price in Sydney is $1.1 million. The mortgage lenders usually lend 7 times the annual income which makes the maximum borrowing capacity for average Sydney siders is $630,000. This makes it impossible for an average house hold to purchase a house in Sydney.
Population: Sydney population is currently at 5 million and expected to rise to 40% by 2036. The housing supply in Sydney is unable to keep up with the population growth.
Migration: As most of the jobs are concentrated in Sydney area, potential migrants prepared to assimilate in Sydney rather than other capitals cities. This puts upwards pressure on Sydney property prices. The Sydney property market is beyond comparison with the other state capitals.
Government Intervention: The government artificially stimulate the economy through various policies including the Fiscal and Monetary policies, tax Incentives and release of land for development. The state government is also providing incentive to companies to move its operation from Sydney CBD to Parramatta. This will make it very attractive for people travelling from outer suburbs of Sydney like Liverpool, Campbell town and even Blue Mountains and central coast.
First home buyer’s scheme: The NSW Government has developed a new package of measures designed to improve housing affordability across NSW. The package aims to give home buyers a fair go by increasing grants and concessions available to first home buyers, increasing housing supply at reasonable prices and accelerating the delivery of infrastructure to support growing communities. Some of the incentive include abolishing stamp duty for all homes up to $650,000, provide $10,000 grant purchaser of new homes up to $600,000.
Based on the problem statement and research questions ,the following represents research questions could be used to examined the project .Ho represents Null hypothesis while H1 represents Alternate or positive hypothesis. There were five hypotheses identified with both the Null and positive hypotheses.
Hypothesis 1:
H0: Increased housing supply will put downward pressure on Sydney Property Prices.
H1: Housing supply will not have an effect on Sydney house prices.
Hypothesis 2:
H0: RBA Interest rate policy will have an effect on Sydney house prices
H1: The RBA Interest rate policy will not have an effect on Sydney property prices.
Hypothesis 3:
H0: The federal and State government policies will ease pressure on Sydney House prices
H1: The government policies will have a minimal Impact on Sydney market price.
Hypothesis 4:
H0: Australian migration and population growth in Sydney will have an effect in pushing Sydney property price further upwards.
H1: Sydney population growth will have a minimal impact on Sydney property price.
Hypothesis 5:
H0: Tax Incentives provided to residential investors will push the Sydney property price upwards
H1: Tax Incentives will have a minimal effect on residential property investors pushing the Sydney property prices higher.
The following methodologies are used to gather the data and information for the project. They ranges from the data collection to the analysis of the findings. These include the following:
Literature review-The deepness of the study and analysis of the related literature and information available from several sources such as: reviewed letters, articles, Google scholars, CQU library and few books associated to Sydney housing marketing. A deep analysis of the information will also proceed to examine the information of the Sydney housing price and what is to be focused on.
Group focus – this qualitative method helps to recognize how the resources and literature available on Sydney property markets. A broader socio-economic landscape in Sydney via various journals like Australia Financial Review and other financial and general newspaper editorials. The data on average households income and the current property prices in Sydney also helps to analyse in details the trend of housing in Sydney.
Data series and survey (Data collection method): Much information collected from series of journal and survey will be inspected to give an idea about the government of Australia and housing policies in Sydney. This considerations include the price of houses and the government policies on the ownership of a house.
Data Analysis method: This project will use the Mixed Method to analyse data. In which both Quantitative and Qualitative are used. Qualitative analysis is used for analysing data from Australia Bureau of Statistics, Office of State Revenue and the Australian Tax Office.
Schedule of the Research
The following represent the time allocation of the entire project research .The whole table shows the staring time, the duration and the time of the conclusion of the project. Below is additional time schedule presented in Gantt chart method?
|
Work to be done |
Starting of the task |
End of the task |
Number of days taken |
|
Identification of the research requirement |
02/5/2018 |
18/5/2018 |
18 |
|
Deciding on the research questions |
01/8/2018 |
10/8/2018 |
10 |
|
Research methodology formulation |
12/8/2018 |
22/8/2018 |
10 |
|
Research proposal |
25/8/2018 |
29/8/2018 |
4 |
|
Literature review |
03/9/2018 |
20/9/2018 |
20 |
|
Data collection and Data analysis |
20/9/2018 |
10/10/2018 |
22 |
|
Final Report Submission |
15/10/2018 |
25/10/2018 |
10 |
The following explains in details the budget of the proposed project.
The money allocation of the budget is as follows, the task that involves the research of the topic shall cost $900,the collection and the preparation of the questionnaire will cost a total of $5,500 .The research requires a face to face interview which will cost a total of $6,000 for the facilitation. The analysis and compilation of data shall cost $3000.The project may also need some miscellaneous cost in the process. They may be used for purposes of the software systems and other important tools for the research. This may cost a total of $ 3000.
|
S.N. |
Purpose |
Estimated Budget |
|
1 |
Literature review |
$900 |
|
2 |
Questionnaire |
$5,500 |
|
3 |
Interview |
$8,000 |
|
4 |
Data Analysis |
$3,000 |
|
Total Budget |
$7,500 |
References
Chappell, J. and Campbell, N., 2018. The Housing Gap—Sydney, Australia. In Sustainable Development Research in the Asia-Pacific Region (pp. 293-304). Springer, Cham.
Cook, N., Davison, A. and Crabtree, L. eds., 2016. Housing and Home Unbound: Intersections in Economics, Environment and Politics in Australia. Routledge.
Cook, N., Davison, A. and Crabtree, L. eds., 2016. Housing and Home Unbound: Intersections in Economics, Environment and Politics in Australia. Routledge.
Gillon, C. and Gibson, C., 2018. Calculated homes, stretched emotions: Unmasking ‘rational’investor-occupier subjects in large family homes in a coastal Sydney development. Emotion, Space and Society, 26, pp.23-30.
Gurran, N. and Phibbs, P., 2015. Are governments really interested in fixing the housing problem? Policy capture and busy work in Australia. Housing studies, 30(5), pp.711-729.
Knoll, K., Schularick, M. and Steger, T., 2017. No price like home: Global house prices, 1870-2012. American Economic Review, 107(2), pp.331-53.
Kohler, M. and Van Der Merwe, M., 2015. Long-run trends in housing price growth. Reserve Bank Bulletin, pp.21-30.
Kohler, M. and Van Der Merwe, M., 2015. Long-run trends in housing price growth. Reserve Bank Bulletin, pp.21-30.
MacDonald, H., Nelson, J., Galster, G., Paradies, Y., Dunn, K. and Dufty-Jones, R., 2016. Rental discrimination in the multi-ethnic metropolis: Evidence from Sydney. Urban Policy and research, 34(4), pp.373-385.
Rogers, D., Lee, C.L. and Yan, D., 2015. The politics of foreign investment in Australian housing: Chinese investors, translocal sales agents and local resistance. Housing Studies, 30(5), pp.730-748.
Taylor, M., Stevens, G., Agho, K. and Raphael, B., 2017. The Impacts of Household Financial Stress, Resilience, Social Support, and Other Adversities on the Psychological Distress of Western Sydney Parents. International Journal of Population Research, 2017.
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