Research in Project Management: Factors Affecting Housing Prices in Australia

Running head: RESEARCH IN PROJECT MANAGEMENT
Research in Project Management
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1RESEARCH IN PROJECT MANAGEMENT
Literature Review
Introduction
According to Hulse and Yates (2017) housing is considered to be an important factor for
all people. The fundamental need of living is shelter. Ownership of home is key element for
living standards. Home provides independence, privacy as well as security. The people of
Australia places high importance to the ownership of home which is considered as most stable
form of life and wealth creation. Governments of Australia encourages ownership of home by
providing direct grants to the home buyer for first time. About 70% of total population in
Australia lives in the dwellings that are occupied by owners. Out of this, only 50 % of the
dwellings own a house without mortgage loan and other have loans (Maloutas 2016). About 28%
of the population of Australia lives in a rented accommodation as well as three quarters of the 28
% of the private land lords.
Home ownership is an important for all the Australians as housing factor has become an
unaffordable factor in many Australian citires gradually. The established price of the houses
have increased by 110% in the last five years (Troy 2018). So, rental housing has become an
important factor of the people who live in Australia. Details of the price growth of housing are
discussed in this part along with the underlying demand as well as supply for new housing. The
factors that affects the housing price are also included in this literature review.
Long-run Drivers in Housing Price Growth
Framework
According to Plakandaras et al. (2015) the price of an asset or a good is determined by
the demand as well as supply graph. The demand as well as supply factors are to be kept in

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consideration for the framework. One of the framework that is included in the supply demand
network is that there are many approaches and those approaches helps in joint consideration of
demand as well as supply stock flow model in housing market. The framework helps to capture
all dynamic interaction in between the housing demand, prices, as well as supply of housing
market over time.
Favilukis, Ludvigson and Nieuwerburgh (2017) stated that stock flow model of the
demand supply gap, the demand for housing asset; for both for the occupiers and the investors
are inversely proportional to price as well as the user cost. The demand is directly proportional to
the rent. There are other variables also that plays an important role that includes demographic
factors, the total income of the households, as well as cost of the credit and access of the credit in
the household. This comprises various models that are in demand. A model that consists of
housing that is directly related to owning a house with the cost of renting. The cost of user is
mainly dependent on real rate of interest, the running costs, decreasing the asset as well as the
expected real rate of price appreciation of housing.