Literature Review
This section of the paper deals with the summary of the literature review, the justification of the study, the hypothesis, the research questions and the research and design methodology. The section also deals with the limitations faced in by the study as well as the time schedule of the paper.
The review of literature looked on the existing information regarding the socio-economic impacts of the rising prices of housing, with Australia in focus. In a collective attributes of social and economic dimensions, the review was constrained within the aspects of investments in the housing projects based on yearly volumes and average growth, the house price and consumer price indices across the country, socio-economic factors Affecting Housing Price (investment demand, rate of interest, and economic climate), Effects of Rising House Price on the Economy and Households, and detecting the gaps in the literature review.
On the socio-economic path, the existing information by Dvornak and Kohler (2017) confirmed that most of the Australians live in privately owned homes or units. Compared this proportion, few people live in the institutional homes, thus giving the strength to the view that residential properties is an important factor to the people of Australia (Forrest and Hirayana, 2015). For this reason, the review focused on the investment in housing on average terms and found information confirming that there is a declining proportion of demand on those who are buying homes for the first time among the Australians, thereby affecting the overall housing market. In terms of the overall housing valuation, there is a declining housing value in Australia (Yates and Wulff, 2015).
With the increasing standards of living, having variations in diverse segments of the Australian population, the declining number of house sales has been occasioned by most households upgrading or downgrading their homes . With the economic patterns taking shape in the housing market, increasing prices in the market have an effect of reducing demand in the same market (Sutton, 2012). To confirm this, the review of the facts about this revealed that the increasing inflation rate in the housing market is occasioned by the rising housing price for those who are buying homes for the first time and the consumer price indices.
Justification from Assignment 1 literature problems: The problem identified in the literature, i.e. the effects of the rising prices of housing in the Australian housing market from a socio-economic perspective, gives the research a rightful path for pursing the effects. These effects are The Research Objectives
Justification from Assignment 1 literature problems:
Based on this research on the high prices of housing in Australia, there is a crystal clear and important relationship between the responsiveness of the housing and the social economic impacts and developments which has not been adequately addressed in the Australian context. The main objective of the study therefore, is to examine and evaluate the effects of the rising prices of housing in the Australian housing market from a socio-economic perspective. This paper is also tended to shed light on the key impacts of the high house prices in Australia, and also identifies some of the developments and the adjustments that the can be put in place to reduce high prices to the moderate market prices. The paper also presents the social impacts of the rising house prices for the first time buyers in Australian and highlights some of the economic impacts of the rising house prices.
An Australian economic growth and the welfare of Australians are very much related and correlated to housing sector. Recently, the housing affordability has emerged as a widely discussed issue among economists, academicians and even among the policy makers. This paper therefore analyses the current and modern housing market conditions. Specifically, this paper examines the effects of the rising prices of housing in the Australian housing market from a socio-economic perspective over the past years. Moreover, various effects and impacts of the housing prices in Australia that hike the Australian economy are also examined and evaluated.
- Research questions
The general research questions, which formed the basis of the analysis, were based on what was the socio-economic impact of the rising house prices on those who are buying homes for the first time in Australia. However, in order to provide effective exploration to the study topic, the following specific (secondary) research questions were addressed:
- What are the social impacts of the rising house prices on those who are buying homes for the first time in Australia?
- What are the economic impacts of the rising house prices on those who are buying homes for the first time in Australia?
- What are the perceptions of the general public concerning the effect of selected negative and positive socio-economic impact of the rising house prices on those who are buying homes for the first time in Australia?
- What are the measures of housing affordability in Australia leading to these effects?
- Research hypotheses
In relation to the subject under the study, the research hypotheses for this work can be formulated as follows;
Null hypothesis (Ho): the rising house prices on those who are buying homes for the first time in Australia have socio-economic effects.
Alternative hypothesis (Ha): the rising house prices on those who are buying homes for the first time in Australia do not have socio-economic effects.
Qualitative and quantitative research was adopted where necessary in a descriptive process of testing, examining and checking on the interaction of key factors. The survey was used to collect information for the study and obtain information from a sample of people by means of self-report. This is where strategically designed questions were used to extract information from the respondents. More than that, in good cases where interview was not used, the study extracted information from the existing sources of information such as the books, articles, and internet.
Research Objectives
The survey is descriptive in nature and was used in giving a competent reflection of the characteristically behavior of the housing market in Australia. These reflections were also based on the existing beliefs, systems, opinions, and more importantly, the perception in the Australian residential property industry. With this, the design was chosen because it met the objectives of the study, of determining and analyzing the socio-economic impact of the rising house prices on those who are buying homes for the first time in Australia.
The sampling technique in this study involved the methods employed by the study that came up with the sample that would represent the pricing pattern of housing in Australia. The sampling technique was adopted as the selective criteria. In this criterion, the selection of the sample was in the form of multiethnic selection and multicultural selection. Through this means, the study came up with data representing the income distribution of those who are buying homes for the first time, the Housing Costs, the employment status of those who are buying homes for the first time with a mortgage, and the established house prices in Australia.
The study used the Slovene’s formula, n = N / (1 + N e2) where n = Number of samples, N = Total population and e = Error tolerance. The error tolerance uses 98% confidence level making the alpha (e) be 0.02.
n= 100/ (1+100e2)
n=100
The research instruments adopted by this study included secondary sources from the existing materials, questionnaires and interview guides. Well-structured questionnaires and interview guides were used in order to uncover the socio-economic impact of the rising house prices on those who are buying homes for the first time in Australia. The construction of the questionnaire followed up with the variables, both dependent and independent, upon which were the interest of the study. Questions were asked targeting these variables to be extracted from the respondents.
As far as these instruments were concerned, they were able to collect both nominal and ordinal level data. The questionnaire was also designed in a simple form to avoid confusion among the respondents. Pilot study was also conducted to enable the researcher get acquainted with the area and population of interest (Yong, 2011). The pilot ensured that it ascertained the reliability of the research instruments and the methodology adopted by the research.
Whereas validity of the research referred to the credibility or believability of the research, reliability of the same research referred to the repeatability of its findings in a way that it was relied upon by other studies. The validity of the study was checked through the pilot survey done one the socio-economic impact of the rising house prices on those who are buying homes for the first time in Australia (Wadud et al. 2012).
Project Scope
For validity, there was need to determine the internal consistency of the estimates that were used in determining the relationship between the variables. In this case, the internal consistency of the estimates was determined using the coefficient of internal consistency as was provided by the Cronbach’s alpha, which provided an estimate of the reliability of measurements estimating internal consistency reliability.
One of the research principles was to conduct research in an ethically organized manner without violating rights of people. This study was done with the utmost apprehension of the ethical affluences of the targeted population. In this case, therefore, this research was clear on the ethical issues as far as researches are concerned. Some of the ethical issues expected in this paper involved informed consent whereby a person knowingly, voluntarily and intelligently, and in a clear and manifest way, gave his/her consent. The other issues were the respect for anonymity and confidentiality in conducting research and the respect for privacy (Eslake, 2013). This study was to ensure that the respondents were treated with respect and the integrity of every individual maintained within the ethics of doing research.
Research Limitations
The study was not done under the express automation of every need for the work. Although the study undertook every advantage at the disposal, there were two main sources of limitation for the study. These limitations were the limitations of time and financial constraints that could not allow the study to achieve much of the expected results.
Time Schedule (Research plan)
The time frame for the project was set in such a manner that every component of the whole work was to fall within the limit of time given. However, the overall work took two months due to the time and financial constraints exhibited by the study.
Conclusion
In every economy, the housing sector is pivotal for the general welfare of the people and investments. In Australia, this sector is vital for the Australian economic growth and welfare of Australians. Through the analysis of the Australian current Australian housing market, the study aims at establishing the links causing the house price hike over last few years. As stated in the introductory section, the main aim of this research was to discuss the socio-economic impact of the rising house prices on those who are buying homes for the first time in Australia. As it is mentioned above, it is clear about the social segment of the study, involving the societal culture, way of life, and the economic segments such as the Gross Domestic Product (GDP), the relational pact between the housing market’s price and demand. For this reason, Wadud, et al. (2012) states that there is every possibility of the private consumption going up as the housing prices goes up and the home owners feel to have more wealth than before. The statement is also affirmed by Forrest and Hirayama (2015) that the financial behaviors of the home owners changes the aspects of normalcy in price and increases the general prices of property, thereby positively affecting the real Gross Domestic Product in Australia.
Research Questions and Hypothesis
While critically examining the socio-economic impact of the rising house prices on those who are buying homes for the first time in Australia, it is important to acknowledge the economic relationship with the housing market is defined by the principle of consumption-income hypothesis. In this hypothesis, Wadud, et al. (p. 849-863), an increase in house price indicates an increase in household wealth, thus the owner-occupiers may increase their consumption expenditure reducing their savings.
It is true that the housing affordability in Australia has a number of surrounding factors, some of which are economic repercussions and negative social impacts. Based on the study done by Dvornak and Kohler (2017), there is a way to argue that the highly socially corrosive issues by nature have a way of affecting the affordability of housing in Australia.
The deviations that exist in terms of income distribution or differences in the purchasing power create both social and economic gaps that trigger the pricing patterns in the housing market. Therefore, this argument by Dvornak and Kohler (2017) affirms the statements by Yates and Wulff (2015) that with median house prices surging ahead of wage growth, particularly in the eastern capitals, many young families trying to save for a mortgage deposit are forced to live for many years with parents and in-laws. This forces most Australians to squeeze into smaller living spaces and reduces material living standards across all generations.
This study also evaluated the possible effects of this increased housing price on the Australian economy and as well as on the households or the Australian society. While examining the various variables like the interest rates, investment demand and existing economic climate as they play critical role in dictating the housing prices, this study remains relevant not only to the Australian socio-economic welfare but also of the world.
References
Forrest, R. and Hirayama, Y., 2015. The Financialisation of the Social Project: Embedded liberalism, neoliberalism and home ownership. Urban Studies, 52(2), pp.233-244.
Dvornak, N. and Kohler, M., 2017. Housing wealth, stock market wealth and consumption: a panel analysis for Australia. Economic Record, 83(261), pp.117-130.
Eslake, S., 2013. Economic factors affecting the housing market: Research Discussion paper, 67(234), PP. 120-156.
RBA. 2015. Recent developments in housing prices, finance and investor attitudes: Review Bank of Australia Bulletin, 12(4), pp. 34-67.
Wadud, I.M., Bashar, O.H. and Ahmed, H.J.A., 2012. Monetary policy and the housing market in Australia. Journal of Policy Modeling, 34(6), pp.849-863.
Sutton, G., 2012. Explaining the changes in housing prices: BIS quarterly Review, 56(3), pp. 206-345
Yates, J. and Wulff, M., 2015. Market provision of affordable rental housing: lessons from recent trends in Australia. Urban Policy and Research, 23(1), pp.5-19.
Yong, T., 2011. Segmentation of Australian housing markets: Journal of Property Research, 17(4), pp. 311-443.
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