Business Finance: Analysis on Sydney Housing Price, Income Growth, Loan Availment, Property Value and Upfront Payment

Running head: BUSINESS FINANCE
Business Finance
Name of the Student:
Name of the University:
Authors Note:

BUSINESS FINANCE
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Table of Contents
1. Conducting analysis on the housing price of Sydney and depicting the future prices:..........2
2. Detecting the growth in income of the client by understanding the income growth rate of
Sydney citizens:.........................................................................................................................3
3. Indicating the maximum loan that can be availed by the client, while identifying her net
income and tax:..........................................................................................................................4
4. Understanding the level of property, which she could buy with or without premium
payments:...................................................................................................................................5
5. Understanding when the property could be bought under 20% upfront payment and 5%
upfront payment:........................................................................................................................6
6. Depicting the impact on mortgage payment when interest rate increases to 7%:..................8
7. Depicting the risk involved in the plan drafted for the client:...............................................8
References:...............................................................................................................................10

BUSINESS FINANCE
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1. Conducting analysis on the housing price of Sydney and depicting the future prices:
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$-
$0.50
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$1.02 $4.51
Sydney Housing price in Million
Figure 1: Graph of future 20-year housing prices in Sydney
(Source: As created by the author)
The changes in property price can be identified from the above figure, which helps in
understanding the level of expenses that will be incurred by the client to acquire the Austrian
dream. The property price has a relatively grown who are the historical period at the of
1.88%, which is derived from the change in prices of dwelling in Sydney. Therefore, it could
be estimated that within the period of 20 years the housing price in Sydney would eventually
increase from $1.02 million to $4.51 million. this relatively indicates the rising prices in
property, which is estimated to incur in future. The data is directly derived from ABS website
containing the prices of established house transfers in Sydney. This relatively helps in
understanding the level of Expenses it needs to be conducted by the client to acquire the
house in Australia.

BUSINESS FINANCE
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2. Detecting the growth in income of the client by understanding the income growth rate
of Sydney citizens:
Time Income Yearly Income Four Year Avg Income Growth
1994–95
$
642 $ 33,384
1995–96
$
626 $ 32,552
1996–97
$
648 $ 33,696
1997–98
$
664 $ 34,528 $ 33,540
1999–2000
$
692 $ 35,984 $ 34,190 1.9%
2000–01
$
709 $ 36,868 $ 35,269 3.2%
2002–03
$
726 $ 37,752 $ 36,283 2.9%
2003–04(a)
$
806 $ 41,912 $ 38,129 5.1%
2005–06(a)
$
870 $ 45,240 $ 40,443 6.1%
2007–08(a)
$
994 $ 51,688 $ 44,148 9.2%
2009–10(a)
$
981 $ 51,012 $ 47,463 7.5%
2011–12(a)
$
1,015 $ 52,780 $ 50,180 5.7%
2013–14(a)
$
1,046 $ 54,392 $ 52,468 4.6%
2015–16(a)
$
1,070 $ 55,640 $ 53,456 1.9%
Average Rate 4.8%