Property Investment and Finance

Running head: Property Investment and Finance
Property Investment and Finance
Name of the student
Course name
Course ID

1
Property Investment and Finance
Table of Contents
Introduction......................................................................................................................................3
Economic and non-economic factors that are influencing housing demand of Australia...............3
Significance of negative gearing in Australia..................................................................................5
Conclusion.......................................................................................................................................7
Reference list...................................................................................................................................8

2
Property Investment and Finance
Introduction
The Australian housing market is having volatile character with disruptive price of
housing prevailing making the situation of the consumers worse. Immediate impact of mineral
boom has fallen upon housing prices in Australia. Property price in Perth, Darwin and in some
cities like Mackay has witnessed high-rise of the prices. One of the main reasons behind such
abrupt rise in price is the dramatic decline of interest rate that has been originated from high and
volatile inflation from 1970-1980. Along with declining interest rate, the high rate of competition
within the mortgage market has resulted in increasing rate of mortgage than official cash rate.
Economic and non-economic factors that are influencing housing demand of Australia
Prices of housing market in Australia are having positive relationship with factors like
interest rate, investments and rent of the houses. Even the Australian housing model that has
been developed by Reserve Bank of Australia includes factors like building approvals,
completions or the vacancy rate. Some of the factors that have been identified as significant for
influencing housing demand of Australia are building approvals, number of housing stocks that
are having within economy, rental price and rental policy and dwelling price.
Non-economical factors that are having impact on the demand of housing in Australia are
types of housing that is prevailing within the economy of Australia. Residential building
approvals, trends of housing prices including the consumer price index and housing prices index
are found to have impact the demand of housing. The amount of building approval for residential
complex have increased compared to previous years. In 2006-2007, the total amount of buildings
that has been approved is around 152,790. Even the approval for semi-detached homes, terrace-