Property Market Analysis: Impact of Government Policies on Investment Decisions

In this document we will discuss about Property Market Analysis and below are the summary points of this document:- The report analyses the impact of the Australian government on property investment decisions. The chosen property for analysis is located at 171, Burwood Road Burwood, NSW 2134 in Australia. Factors such as town planning, heritage listings, native titles, governmental policies, and investment risks and returns are discussed in the report.

Running head: PROPERTY MARKET ANALYSIS
Property Market Analysis
Name of the Student:
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Executive Summary:
For this report, a particular property has been chosen, which includes 171, Burwood Road
Burwood, NSW 2134 in Australia. The paper would intend to analyse the ways through which
the government could have impact on the decision-making process of the decision-making
process of the investors. It has been found that the favourable heritage listings and native titles
along with government policies could pose significant opportunities for investment in the
selected property. Finally, it has been analysed that such investment contains a number of risks
and returns, which are to be taken into consideration before undertaking any investment decision.

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Table of Contents
Introduction:....................................................................................................................................3
Town planning:................................................................................................................................3
Heritage listings:..............................................................................................................................4
Native titles:.....................................................................................................................................5
Government policies:.......................................................................................................................6
Investment returns and risks:...........................................................................................................7
Conclusion:......................................................................................................................................8
References:......................................................................................................................................9

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Introduction:
The Australian investors always find property as an attractive form of investment. For
this report, a particular property has been chosen, which includes 171, Burwood Road Burwood,
NSW 2134 in Australia. The paper would intend to analyse the ways through which the
government could have impact on the decision-making process of the decision-making process
of the investors. Hence, adequate emphasis would be provided on a variety of issues. These
issues mainly include town planning, native titles, heritage listings, governmental policies along
with investment returns and risks. All these factors would help in assessing the impact of the
government on the decision-making process of the investors.
Town planning:
Before discussing the issues related to town planning, the property chosen for this report
is illustrated as follows:

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Figure 1: Property chosen- 171, Burwood Road Burwood, NSW 2134
(Source: Rpp.rpdata.com 2019)
In order to attract investment in New South Wales, the state government of New South
Wales has undertaken projects and they are prioritised for fulfilling wider economic and town
objectives like jobs, accessibility, healthy environments and affordable housing
(Infrastructure.gov.au 2019). The infrastructure funding would be treated in the form of long-
term investment and they would be involved in the earlier stage for assuring that projects result
in opportunities for renewal of the chosen areas along with raising private capital. By
formulating innovative funding approaches including value capture, the balance sheet statement
would be leveraged for delivering more essential infrastructure earlier (Dowling, McGuirk and
Bulkeley 2014). The authority would work throughout all government levels for developing City
Deals for unlocking private and public investments in major economic centres. With the help of
incentivising reforms, additional benefits would be generated for conducting businesses. As a
result, these steps would help the investors in maximising their overall returns on investments.
Heritage listings:
Since the property is located in New South Wales, there are a number of heritage listed
properties or heritage items, which are mainly popular landmarks or buildings of historical
importance such as the Mint (Enever, Isaac and Daley 2014). In Burwood district, the following
are the main heritage listed items:
 Burwood Post Office
 The Priory, Burwood
 St Cloud Burwood

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 Burwood Sewer Vent
 Congregational Church
 Woodstock, Church Street
Since Burwood has a number of heritage listings, the investors could enjoy certain benefits.
Firstly, the concerned property could have greater resale values due to increased protection
provided by the government owing to the heritage listings nearby. Moreover, there would be
certainty that the purchased property would not be changed highly or rezoned owing to the
governmental protection (Head and Crowley 2015). Finally, if the property is maintained
properly, it would retain its appeal along with increasing in rarity and potential value with the
passage of time. Hence, the heritage listings protected by the state government of New South
Wales would help the investors in earning better returns on their investments (Hoesli and
MacGregor 2014).
Native titles:
In accordance with the “Aboriginal Land Rights Act 1983 (NSW) (ALRA)”, the
Aboriginal Land Councils (ALCs) could claim certain crown land for the aboriginal people
(Alrc.gov.au 2019). On case of 171, Burwood Road Burwood, NSW 2134, the property is not
listed as crown land and hence, the investors would not have to pay increased amount of land
tax, which would be provided in the form of compensation to those individuals.
In case, when planning is made by ALC to sell a land, it is necessary to obtain a
determination in accordance with the “Native Title Act” for ensuring that there is no existence of
native title in the area (Alrc.gov.au 2019). 43 non-claimant determinations have been found that
there is no native title in New South Wales, as brought by ALCs, out of which 36 have not been

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opposed. Hence, the concerned property would not be an issue for investment purpose, since
there is no native title associated with it, which otherwise could have lowered the return on
investment. Moreover, the state government in New South Wales is formulating new policies
and reforms that would provide facilities to the investors along with obtaining funds for
economic welfare of the state.
Government policies:
The state government of New South Wales has increased its overall spending for
encouraging the business environment in the state. However, one of the significant barriers is the
overly complex regulatory requirements and they are not mentioned properly, which would lead
to poor understanding for the investors (Reddy, Higgins and Wakefield 2014). The chosen
property is not an exception to this situation as well. Hence, for attracting the investors, the state
government needs to concentrate on eliminating or minimising barriers, complexities and costs
along with making the regulatory bodies easier for understanding and implementation.
Along with this, the government has enforced digital channels to carry out 70% of
property investment transactions online. The primary focus is to overcome the constraints as well
as barriers to online transactions along with enabling new transactions to be conducted using the
online platform. Therefore, it has undertaken significant steps for the property investors to
conduct online transactions for ease of investment. This has been ensured by offering secured
online systems of payment, live chat for instant support of message along with e-mail or SMS
notifications and finally, by progressing the transition for servicing New South Wales. Thus,
these favourable government policies would provide higher returns to the property investors in
future.

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Investment returns and risks:
It is noteworthy to mention that the property market in New South Wales contains a
number of risks. However, acceptance of increased risks would lead to better returns for the
investors. Hence, the investors need to consider a number of factors before undertaking
investment decisions in the property market of New South Wales. For the property of Burwood
Road, the following risks and returns are deemed to be significant:
Commercial real estate:
Since the chosen property is a commercial real estate, it consists of business centres and
office spaces containing minimum risk and return. This could be considered as a stable property
situated in a prime location (Slaev 2017).
Condition and age of the property:
Since the concerned property is aged and located in a prime place, the investment could
be promising from the perspective of return. However, the only risk is the age, since it would
need increased maintenance charge along with some reconstruction amount.
Foreclosed property:
It is noteworthy that the selected property is foreclosed, which increases the overall risk
and return. The investors tend to avoid in this type of property, since the risk level is deemed to
be high in such investments (Turvey 2017). However, if wise investment decision is undertaken
by taking into account all possible consequences and reselling it to another buyer in future, it
would provide significant returns to the investors.
Purchase at a low price:

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If lower investment is made in the property waiting for the price of the same to increase
in future, the significant risk involved is considerable amount of money needed for
reconstruction. This amount would be added with the purchase amount along with the waiting
time. Thus, there is uncertainty of when there would be an upsurge in the property market, time
could be extended with no real inference.
Conclusion:
By considering all the above-discussed aspects, it could be stated that with the help of
incentivising reforms undertaken by the state government of NSW, additional benefits would be
generated for conducting businesses. As a result, these steps would help the investors in
maximising their overall returns on investments. Moreover, the favourable heritage listings and
native titles along with government policies could pose significant opportunities for investment
in the selected property. Finally, it has been analysed that such investment contains a number of
risks and returns, which are to be taken into consideration before undertaking any investment
decision.

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References:
Alrc.gov.au., 2019. Land rights and native title in the states and territories | ALRC. [online]
Available at: https://www.alrc.gov.au/publications/land-rights-and-native-title-states-and-
territories [Accessed 8 Feb. 2019].
Dowling, R., McGuirk, P. and Bulkeley, H., 2014. Retrofitting cities: local governance in
Sydney, Australia. Cities, 38, pp.18-24.
Enever, N., Isaac, D. and Daley, M., 2014. The valuation of property investments. Estates
Gazette.
Head, B. and Crowley, K. eds., 2015. Policy analysis in Australia. Policy Press.
Hoesli, M. and MacGregor, B.D., 2014. Property investment: principles and practice of portfolio
management. Routledge.
Infrastructure.gov.au., 2019. Smart Cities Plan. [online] Available at:
https://infrastructure.gov.au/cities/smart-cities/plan/index.aspx [Accessed 8 Feb. 2019].
Reddy, W., Higgins, D. and Wakefield, R., 2014. An investigation of property-related decision
practice of Australian fund managers. Journal of Property Investment & Finance, 32(3), pp.282-
305.
Rpp.rpdata.com., 2019. CoreLogic. [online] Available at:
https://rpp.rpdata.com/rpp/property/detail.html?
propertyId=1652167&index=12&q=Burwood+NSW+2134&qt=address&_qt=address&offset=1
&sort=address&limit=20&view=report_property&mode=&radius=1.0Km&propertyType=BUSI
NESS&is_workflow=true [Accessed 8 Feb. 2019].

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Slaev, A.D., 2017. The relationship between planning and the market from the perspective of
property rights theory: A transaction cost analysis. Planning Theory, 16(4), pp.404-424.
Turvey, R., 2017. The economics of real property: an analysis of property values and patterns of
use. Routledge.