Impact Of Global Financial Crisis On Australian Property Market Essay.

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The research title of this study is to investigate the Impact of Global Financial Crisis on Australian Property Market.

The key purpose of this research is to investigate impact of Global Financial Crisis on Australian Property Market. The researcher accomplishes the following objectives to complete aim of study:  

• To explore methods wherein the crisis of the financial market for real estate market place.
• To identify the factors that affect the real estate fluctuation in the Australia market
• To discover probable approaches to decline volatility of the property market.  

The property market is increasing from Australia, USA and UK to China, Spain, as well as France. An increase in property rate was since the early 2000 due to higher demand for the real estate, which has gained because of interest rate for loans as well as scope of practicing the security. The borrowers invested into housing properties whose rates were ever increasing as well as resell those to earn profit for refining their mortgages (Mera and Renaud, 2016). The financial crisis in the year of 2008 to 2009 has fundamentally influence the real estate market of Australia. It could generate complexities within the economics acts of nation.  

Under such environment, it is significant to assess acts in real estate market of Australia. By assessing factor behind alterations in real estate value, it is assessed that where real estate market was influenced by GEC (global economic crisis) (Jackson, 2018).  

In 2008 to 2009, global crisis has directly impact on the economics condition of the country as well influences the all events of the country. But, real estate market is different crisis that is beginning by gaining demand for house because of higher growing estimation. Crisis has created in the US as well as influenced nations such as Japan, Canada, Australia, China, Greece, Spain, India, New Zealand, and France. Thus, it is evaluated that the global crisis could impact on the overall business performance of the Australia (Yates, 2014). The housing gurgle could direct for bursting real estate business, which may influence investor at higher extent. Hence, it is required to assess fluctuates in real estate business because of national economic crisis (Ley, 2017).  

It could be expected that global economic crisis is highly impact on the property market in Australia. It is also evaluated that the rate of interest is not increased effectively as well as inadequacy of real estate in the Australia restricted trickle of booming in real estate market.

By using investigation, it could be predicted to address technique wherein a crisis is channelized to property market by the financial marketplace (Dreger, Kholodilin, Ulbricht, and Fidrmuc, 2016).  

Purpose of the Research

The following research hypothesis is considered by the researcher to evaluate presume outcome for particular study:

• Null Hypothesis (H0): There is positive relationship between Global Financial Crisis and real estate market of Australia.
• Alternative Hypothesis (H1): There is no relationship between Global Financial Crisis and real estate market of Australia.

According to Lizieri and Pain (2014), there are different causalities liable for creating the global financial crisis in the housing sector like basic capital as well as high-interest funds are organised through absolute capital. Moreover, secured loan as well as security is transformed to obligation in relation to obligation.  These loans were allocated to different stakeholders such as universities, schools, hospitals as well as local councils. Furthermore, a non-bank loan as well as mortgage giver was relied on funding in shorter time period. It was acquired through shareholders of US. These shareholders have declined their trust on the housing sector due to mortgage issue. It may create the complexities for the lender with respect to non-bank. These were primary victim between Australian companies during global crisis. But, Australian bank were less visible security with respect to sub-prime finance.

In contrast to this, Sassen (2016) stated that global crisis has created shortage of supply in relation to real estate market. Hence, the enhancement in the process of houses of Australian market has increased on daily basis. In addition, it is evaluated that the financial crisis could directly impact on the liquidity of the firm that was being a major issue for the organization.  A financial institution is major recognized borrowers of Australian economy. It highly depends on the off-shored financing as well as faces complexity to refinance their maturing outstanding amount.

According to Gündüz and Kaya (2014), there are high amount of corporations and real estate companies that declining their business because of expansions in decline in the ban loans. In addition, it is examined that the rate of Australian property is not declined unlike USA because it maintained by higher income as well as comparatively low-interest rate. But, certain investigation has found that shortage of housing, as well as high population, is the sources of higher housing rate. It is addressed that repetition in loan of housing significantly extraordinary and it involves grave anxiety. It could not be considered due to shorter period as well as growth in the minimum wages.

In opposed to this, Bryan and Rafferty (2014) evaluated that there are huge obstacles that had emerged due to high-interest rate. The real estate market leftovers in inflexible hold bubble of housing related to history of Australia. In Melbourne as well as Sydney, sales of housing are declining and leasing activities is also diminishing in the year of 2008. But, the resources are booming in Queensland and it is supported by the property market of Brisbane. In the year of 2009, the income, as well as wealth condition of citizen, has diminished by 10% because the impact of financial crisis on housing market has led to highly decline the equity rates.

Factors Affecting the Real Estate Market

As per the view of Morales and Andreosso-O'Callaghan (2014), the common citizen of nation is suffered to afford better housing and it may lead to bankruptcy. The value, as well as effectiveness of property market, has been declined in Australia as the prices of asset have declined. It is evaluated that the housing rate of Australia is more affected in the 2008 to 2009 that decline the standard of living of the regional people who stayed in the Australia. Moreover, after the global crisis, the economy has improved in least time that was major achievement for the Australia.

In contrast to this, Ouma (2014) illustrated that fact of sales amount during the crisis was highly captured through low ranked private purchaser as compared to institutional as well as prime purchasers. The reason behind the declining revenue in relation to commercial housing was that shareholders have inadequate finance as well as they are unassured for taking risk in business. It is primarily due to limitation in context of development practices that current company has delayed in their commitments. Furthermore, Australia was one of nations, which are highly affected through the global financial crisis.

The research methodology is vital tool for obtaining the favorable result. It might entailed in the research methods such as approach, strategy, information gathering method, data analysis method, ethical consideration, and research limitation as it is described as below (Borio, 2014).

Research tactic is imperative in collecting feasible information towards the research matter. There are two kinds of methods like inductive and deductive approach. It could be imperative for collecting the feasible information about research matter. Furthermore, the research scholar will imply deductive approach that facilitates to the researcher to make research hypothesis on behalf of the current matter and reach at the reliable conclusion. Apart from this, the deductive approach is effective for evaluating the collected data and leads to get favorable result (Sornette, 2017). This method will leads to critically evaluate the factors that might influence the real estate market of Australia.

The research design could consider certain types like exploratory, descriptive, and explanatory research design. In addition, it is evaluated that the exploratory design could be imperative for obtaining the reliable information about the research issue. In addition, explanatory design is used to explore information of collected data and meet aim and objective. In addition, it is evaluated that descriptive design is effective for evaluate the relationship between two variables like independent and dependent factors (Herndon, Ash, and Pollin, 2014). In this study, the independent variable is Global Financial Crisis and dependent variable is Australian Property Market. Furthermore, it is examined that descriptive research design could leads to deeply evaluate the research matter and leads to get favorable outcome.        

Effects of the Global Financial Crisis on Australia

The research methods could lead to systematically operate the study and lead to reach at the favorable conclusion. Further, qualitative as well as quantitative research technique is known as the research methods. For conducting this investigation, researcher will practice the qualitative research tool to get conceptual information towards the impact of global financial crisis on Australian property market. In addition, it is evaluated that the research is imperative in collecting suitable facts with respect to the research dilemma. Moreover, descriptive research design is suitable for getting favorable result outcome (Herndon, Ash, and Pollin, 2014). 

In the research design, two kinds of methods like primary and secondary information tool. Moreover, primary information techniques lead to get fact based data about the research matter. The primary data collection method could entail many sources such as interview method, observation method, and survey through questionnaire. The secondary data collection is an imperative tool this for the investigator to obtain the theoretical information about study matter (Borio, 2014). In study, investigator will practice the secondary information collection method and collect data in the context of the research issue. The secondary data collection toll will be collected by considering the certain sources named offline sources, books, journals, and articles. Moreover, it could be significant in the accomplishment of targeted aim of the study.  Further, secondary data is effective for collecting the information from the existing sources. It will lead to reach at the reliable conclusion (Sornette, 2017).        

Under this section, investigator will be imperative in collecting data in relation to research issue. It could consider different tools  like quantitative data analysis method and qualitative analysis method as it leads to get reliable information towards research issue. It is evaluated that qualitative data analysis will be practiced by the researcher to obtain theoretical data towards the research issue In addition, it is evaluated that researcher will not imply the quantitative research method as it could be more costly and time-consuming process as compared to the qualitative research (Sornette, 2017).          

 There are certain factors that might be considered in the research like time, cost, and resources. In addition, it is examined that lack of resources could lead to the investigator for the attainment of research objectives in least time. Investigator could be imperative to consider such factors for increasing the productivity of the firm (Borio, 2014).   

The dissertation structure is effective for comprehending the structure of research like literature review, introduction, data analysis, research methodology, and conclusion recommendation (Sornette, 2017). It will be significant in making reliable data towards research issue. It is discussed as below:

Research Hypotheses

First chapter will lead to understand certain elements like objectives, background, justification, as well as potential outcome. It could be imperative in gaining knowledge towards research matter. It could be imperative in increasing understanding towards research issue (Ouma, 2014).      

From literature review section, researcher will gained their conceptual understanding towards the research issue. For collecting the conceptual information the investigator could consider certain sources named online and offline sources, academic sources, books, and journals. It leads to get favorable result in the context of the current matter (Morales and Andreosso-O'Callaghan, 2014).   

Research methodology is an effective for comprehending the different methods like research strategy, research approach, data collection, data analysis method, and research methods, and ethical consideration. It could also leads to comprehend each research topics that will lead to get the favorable outcome (Ouma, 2014).        

Chapter four will support to comprehend the different methods for evaluating the collected data and leads to get favorable outcome.

Conclusion and recommendation 

Under chapter 5, the investigator will summarize the whole research in concise form (Morales and Andreosso-O'Callaghan, 2014).     

For attaining the project within targeted period, the budget of proposed investigation would be approximate $3000.

When developing the research proposal, news articles, as well as journal articles, would be required. This would have need of $500. There would be need of $1400 for gathering the secondary sources such as journal articles, textbooks as well as other online sources in order to obtain depth understanding regarding research concern. This research is based on secondary data as well as qualitative in nature; hence it would have required $1000. In addition, $100 will be required for final report submission.

References

Borio, C., 2014. The financial cycle and macroeconomics: What have we learned?. Journal of Banking & Finance, 45, pp.182-198.

Bryan, D. and Rafferty, M., 2014. Financial derivatives as social policy beyond crisis. Sociology, 48(5), pp.887-903.

Dreger, C., Kholodilin, K.A., Ulbricht, D. and Fidrmuc, J., 2016. Between the hammer and the anvil: The impact of economic sanctions and oil prices on Russia’s ruble. Journal of Comparative Economics, 44(2), pp.295-308.

Gündüz, Y. and Kaya, O., 2014. Impacts of the financial crisis on eurozone sovereign CDS spreads. Journal of International Money and Finance, 49, pp.425-442.

Herndon, T., Ash, M. and Pollin, R., 2014. Does high public debt consistently stifle economic growth? A critique of Reinhart and Rogoff. Cambridge Journal of Economics, 38(2), pp.257-279. 

Jackson, K., 2018. Asian contagion: the causes and consequences of a financial crisis. Routledge.

Ley, D., 2017. Global China and the making of Vancouver's residential property market. International Journal of Housing Policy, 17(1), pp.15-34.

Lizieri, C. and Pain, K., 2014. International office investment in global cities: the production of financial space and systemic risk. Regional Studies, 48(3), pp.439-455.

Mera, K. and Renaud, B., 2016. Asia's financial crisis and the role of real estate. Routledge. 

Morales, L. and Andreosso-O'Callaghan, B., 2014. The global financial crisis: World market or regional contagion effects?. International Review of Economics & Finance, 29, pp.108-131.

Ouma, S., 2014. Situating global finance in the land rush debate: A critical review. Geoforum, 57, pp.162-166.

Sassen, S., 2016. The Global City: Strategic Site, New Frontier. In Managing Urban Futures (pp. 89-104). Routledge.

Sassen, S., 2016. The Global City: Strategic Site, New Frontier. In Managing Urban Futures (pp. 89-104). Routledge.

Sornette, D., 2017. Why stock markets crash: critical events in complex financial systems. Princeton University Press.

Yates, J., 2014. Protecting housing and mortgage markets in times of crisis: a view from Australia. Journal of Housing and the Built Environment, 29(2)