Market research for
SKY HIGH Real Estate
2.2. Planning the research design: 4
The research study seeks to identify and assess factors that have an impact on property developers ' performance in real estate. To determine the current business requirements and to compare it with future needs, Sky High real estate developers need market research for the Australian household and family structure.This will help the real estate developers to figure out which attributes of market portions are crucial for the business and recognize each section from the general market.The real estate is a long term and ambitious endeavor. The designer must understand the recent changes in the architecture.For this study, intensive secondary research was done to understand the market structure and the factors that are hurdles for the sky high real estate.The Problems faced by the organization include house prices fall, disproportionate house pricing, and high household debt to income. The Factors under this study include increasing population, Positive net overseas immigration, Job growth, increasing median age (Children above 17 years), and the household structure. To conduct this study, the data will be collected from primary and secondary resources. The secondary data include data that is already being collected by some else, such as the Government release regarding demographics. The primary data will be collected directly from the respondents by questionnaire method. The study concluded by recognizing and proposing a few methodologies that could improve the presentation of property designers in Australia.
In Australia, practically 55% of the aggregate of Australian family unit resources is in the Housing structure. Australia is likewise one of the nations with a high homeownership rate at around 70%. This study aims to understand the current real estate markets and the factors that affect the business. The research is based on a secondary study to understand the vulnerabilities of the market and projecting future growth in the sector.
Background of the study:Housing is the most significant asset owned by most Australian families. It is a considerable element of household wealth and serves a distinctive, dual function as an investment vehicle and a sustainable commodity that derives from consumer services. Housing is also a significant component of Australia in terms of loans and mortgages. The conduct of several financial factors may be affected by changes in housing prices.
Literature Review:The cost of any good or asset is determined by demand and supply together. Many of the frameworks in the current literature are only partial in this context because of they often an emphasis on either need- or supply-side variables.Ge (2014) demonstrated that the whole week by week profit, nominal home loan rates, joblessness rates, and housing development activities are the key components influencing the Australian Housing market. This study has additionally featured the significance of analyzing the rural housing markets in which the Australian housing markets at subnational levels are profoundly segmented.The study is conducted to provide an insight into the real estate sector of Australia by leadingmarket research for factors like demographics, income, and debt or availability of loans.
2.2. Planning the research design:
Secondary data investigation is an investigation of information that was collected by someone else.Secondary data examination is an observational process that applies integrated necessary research levels from studies utilizing primary information (Boslaugh, 2014).It is a useful alternative in case of limited time and assets. Hence, due to the resource's constraints and availability of reliable data from sources like Australian Government releases, this investigation is conducted by secondary data. The secondary data collected by this method gives an objective view of the demographics like population growth rate, migration rate, etc. The primary data will be received by the process of a questionnaire from the participants directly to understand the buying behavior and capacity about the real estate.
For this investigation, the Quantitative research method is applied. The secondary data is retrieved from Australian Government data, documents, and releases. A sample size of 100 participants is selected through stratified random sampling techniques in the categories of Households (Couple or others), dependent children, independent children and children aged between 0-17 years, native residents or immigrants. The responses by the participants will be directly recorded by the method of a questionnaire in the above-said categories. The primary data is based on the different segments of the given population. The primary and secondary data will be used to derive the results for this study.
The secondary data collected in the respective categories are plotted in three different charts –Population Growth, Household structure, and Housing debt to income. The Population Growth charts display the average population growth in the past years (2012-2017) and in 2018-19. The average population growth of Australia is positive, which is posted in two categories, namely, population growth for the last five years (2012-17) and the year 2018-19. The net migration rate is positive and hence, which also contributes to the favorable population growth. The Household structure chart presents the family characteristics in Australia 2012-2013 (ABS, 2015).The Australian household is divided into family households, Lone person, and group households. The family structure is understood in the categories of a couple, one parent, and other families. As per the OCED report, the Housing debt to income ratio across the globe is depicted in the respective chart. This chart helps in assessing and identifying the position of Australia in this particular ratio among the advanced economies.For this study, data is collected from the major cities of Australia, which include: New South Wales, Victoria, Queensland, South Australia. The quarterly housing price returns from the Australian Statistics Bureau were used to evaluate the determinants of housing price volatility. Also obtained from the Australian Statistics Bureau were the consumer price index (CPI), revenue, population, and unemployment rate.
In terms of primary data, a questionnaire and stratified random sampling method will be utilized. The data collection will be done to understand the consumer behavior regarding real estate, specifically the residential housing sector in the current scenario and in the future prospects.
(Source: ABS, 2016)
(Source: ABS, 2015)
(Source: OECD Economic Surveys Australia, 2018)
According to the Parliament of Australia (2019), Australia ranks 13th in terms of the total population with the fourth fastest population growth in the world. The net migration rate is a favorable ranking as the fourth fastest. As per the median age, Australia ranks at eight positions. In 2012-13, 71.3% were family households, 24.4% were single-person households, and 4.3% were group households in Australia (ABS, 2016). The number of dependent and independent children in the age group of 0-17 years will increase in the households of a couple, one person and other families. These demographics are critical indicators for the positive growth for a real estate organization, for instance, sky high real estate in this case. Looking forward, this enhanced number of young age will swell the working group of Australia and hence increase real estate demands. It is exhibited by the Population growth chart that population growth will sustain its pace and will grow reasonably in the coming years. Unlike the previous trend, since the 2000s, the average size of the family has altered little. Changes in average household size represent a mixture of demographic changes, preferences of households, and endogenous reactions to house prices. Hence, the population growth, along with job growth, will remain high in the coming years; the real estate sector will remain buoyed.
The Housing debt to income indicates that the household debt is increasing with surging household prices. This heightened ratio has placed Australia at the second spot in the advanced economies in the world. The increase in household debt is more prominent in higher-income households. The higher debt adds to the vulnerability in the times of financial recession and can lead to decreased future growth.Reduced price in the real estate market reflects the lagging employment growth and oversupply of housing. Much of the downward trend over the last five centuries has been ascribed to demographic modifications arising from dropping fertility rates, an aging population, and increasing household incomes. These forces led to smaller homes demanding more housing on average for a specified population level.
The study has indicated that factors like debt to income ratio, demographics, and migration rate can significantly influence the real estate. From the mid-1990s till the mid-2000s, the ease in financial borrowings led to an increment in the household's capacity for affording higher house debts. (Kohler, 2015). The previous decade saw an adjustment of debt to income levels, yet in addition to a reasonable population growth – supported by high movement – and shrinking size of family units that prompted increments in demands surpassing the supply of new homes.Nonetheless, prolonged periods of population growth fluctuations that are not met by residential supply modifications could lead to periods of significant change in the price growth of housing (Real Estate Outlook, 2018). One of the significant factors for the development of housing prices is the capacity of fresh housing supply to react to demand changes.
It is suggested that the Positive net overseas immigration is a crucial indicator for providing housing at sustainable prices and developing real estate accordingly (Sherrell, 2019).The first recommendation is to use a valid pricing and financial structure for the customers that can bring an upsurge in the sales for Sky High real estate. The second recommendation is to target the youth segment (Children above 17 years) with modern housing and financial loan facility.