Abacus Property Group Market Analysis: Semester 2, 2023

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Economics for Business
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Table of Contents
Introduction...................................................................................................................... 3
Introduction to the company.............................................................................................4
Industry background.........................................................................................................5
The market structure of the industry.................................................................................6
Factor Influence demand for the product of the company................................................8
Factor that influence supply of the product......................................................................9
Elasticity......................................................................................................................... 10
Major event in recent time for Australian Market............................................................11
Conclusion..................................................................................................................... 12
References.....................................................................................................................13
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Introduction
In this report, it discusses the market standard of the industry and the position of the
organisation in the market. In this report, it will study on the Abacus Property, how the
organisation will increase the market share rate, and company's strategy will make them
successful in 5 years with the effective strategies in the consumer behaviour. In the
market, it also discusses the market structure of the industry, it is upgrading with
customer behaviour or not. In the company, there is having many factors that influence
the demand and supply of the company’s product for getting the good goodwill of the
company in the market. It also discusses the elasticity of the product in the market. It
also makes the event for effective or increasing the brand value of the company as well
as the industry in the market.
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Introduction to the company
In this report, it has chosen the Abacus property, Abacus property is the leading
diversified property group in Australia. Abacus was established in 1996, from hard-
working, it has listed on the ASX in 2002, and it has also included in the S&P/ASX 200
index. The Abacus is specialising in core plus property. The Abacus is an entity of three
securities companies, Abacus Group Projects Limited, Abacus Group Holdings Limited,
and Abacus Storage Operations Limited, and three trusts, Abacus Trust, Abacus
Income Trust, and Abacus Storage Property Trust. Investors acquire stapled securities
comprising the securities of all sic listed entities (Abacus Property, 2019). Abacus
property is having the strategy to invest their income in this company and they will
circulate the funds with the requirement of the company.
The Abacus is having different types of work in the market such as property sales,
rental income, and assets value. The Abacus property group will give the rental income
to maintaining the profit through different work, the property will give rented on any time
they will need money than they can sell the property. Abacus property is also giving the
maximum return to the stakeholders of the company, so the stakeholders or investor is
reliable and they will run with both of side. Abacus’s overreaching is making the long
term to maximise the security holder’s value and this can successful from the value
addition such the property will give the maximum return and then they will attract the
customers to make more customisation.
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Industry background
In the industry of the Rental, hiring and real estate services industry, EBITDA slowed
the previous year’s 13.2% ($6.3B), but it is having the current year data is 6.4% ($3.5B).
The data is also strong in the current year (Abs, 2019). Professional, scientific and
technical services industry is running well in the market, industry experienced better
growth in the market, and the growth in 2016-17 with EBITDA up 9.1% ($2.3B) and the
past year data is 0.9% ($238 M) in 2015-16. In the Australian market, there is having
many contributions to the growth of the economy. In the market, there is having many
changes in the worth of the company. The real estate is involving the contribution in the
country. The real estate business is earning revenues in the Australian market that is
$25bn. In Australia market, the real estate is annual growth in 2014-19 is 1.4%, which is
the great thing for the country, in the future, there will be having increase order the
country is also maintaining the terms and condition to the real estate industry (ASX,
2019).
The industry is creating employment in the economy is 135373, in the Australian market
is having the great thing to produce that much of employment in the market. The
employment generation is done by the 39163 business in the market. In society, there is
giving minimum cost to the employees to doing the work in the field. There is having low
capital intensity, for every dollar, the real estate is spending on the average of $16.80 is
on the labour for the work. in the real estate business is doing more commission in the
fieldwork and all the real estate is all linked and they will do the work with the
commission for getting more profit from the customer (ASX, 2019).
The real estate industry is doing a great contribution to the Australian gross domestic
product is $1.15 trillion to the nation’s economy. In the Australian market, the industry
growth rate is having the options in 2011 to 2016, in five years, there is having funding
from the non-VC sources for the real estate. Each business has tech start-ups increase
at a compound annual growth of full year is 72.4% to 2.4 billion in 2016. In 2017, there
is having funding of 3.4 billion in the market for the greatestopportunity of the country
(Abs, 2019).
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The market structure of the industry
There are four types of market structure in the market, and that all are having different
work and the entire organisation is playing a different role in the different structure and
that will decide on the performance of the organisation (Team Wall Street survivor,
2016). In below it has explained the types of market structure:
 Perfect competition market structure
The perfect competition structure is the competition among all the similar company in
the industry and all are competing with all other and they are having the same price in
the market because any company will increase the price the product then the market
share will be decreases of the company because this is having an open and out market.
There is not having a large market share to capture so the price is having the same in
the market.
 Monopolistic Competition Market Structure
Monopolistic competition market structure is different from perfect competition. There is
having changes in the price, they are capable or stable in the market, they are having a
large price of the product because they are having a different type of work. They are
working with their own choice of work and product choice and they are consuming the
large number amount from the customers.
 Monopoly Market Structure
Monopoly market structure is the market in which there is having no competition in the
market, the organisation is having one of the organisation is depended by all the public.
The organisation is minimising the cost and earning maximise the profit. The
organisation is minimising the supply for increasing the rate of the product and earns
large numbers of profit (Team Wall Street survivor, 2016).
 Oligopoly Market Structure
Oligopoly Market Structure is the market, the companies are working with the similar to
other company, the company will merge with other company to get a large profit, and
minimising one competitor.
The Abacus property group is using the oligopoly market structure for working in the
market. The Abacus property is working with the three companies and they all are
having different work and the work will distribute with the different level of the company.
The abacus property is also having three more partners and they are also working in
this group. The Abacus property is the main goal to work with the same standard, and
they are having one of the largest property group to make the difference in the group.
Abacus property is minimising the competitor and they all are working with the team,
and sometimes also they are working with the competitor. In the market or industry, all
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the company is working with the commission for all the organisation (Abacus Property,
2019). The organisation is making the contribution and they focus on the work with the
client. The market structure will get the maximum profit and earning the maximum profit
in the market.
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Factor Influence demand for the product of the company
Abacus property work in the business of property construction and also for investment
activities related to the real estate market of the country. There are many of the factors
which influenced the demand for the product in the market and also impacts on
business growth.
Interest rate
Interest rate is the major factor which can influence the price and demand for household
property in the market. As Intrest rate is higher in the nation then people are more
attract toward rental property for their residential and if the interest rate is low then
consumers want to build their houses on home loans product of financial institution
(Irvine, 2015).
Tax Incentives
Tax rebate can be the major factor which attracts customer toward residential products
of the company and also provides high demand for the products in the market. As tax
policies changes in the Australia impact on real estate business and also sales of the
products of Abacus properties (Irvine , 2015). Any investment loss from housing
property can be a set-off with a taxable income of assessee attract more demand of
products of the company and Further fully rebate on capital gain tax for residential in
term of income from house property.
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Factor that influence supply of the product
Demographical Barriers
Demographical barrier is the major factor which impacts on the supply of the good or
product for the real estate market in Australia, Nowadays, Australian population more
attract towards the small houses and they are pretty much aware related to real estate
business and their product which enable them to bargain accordingly and also impact
on supply of the good of company. Psychological change In term of house property
mold the product and the market of supply towards the demand of the product. Real
estate business depends on high investment of liquid assets which reduce the supply of
the good in the market which helps them to achieve their objectives.
Legal and government policy
Real estate is the big industry which provides a high rate of contribution to the GDP of
the nation. This industry considers the highest rate of liquidity of cash and cash
equivalent asset in the market. Many of the time legal and government policies
restricted the construction of the properties and also impact on the supply of property
(Irvine , 2015). The legal restriction imposed on unethical construction which can harm
society and also the economy of the nation and many of the policies of Australian
government applied on construction activities which limited the use of resources and
also overcome construction of property project for the company.
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Elasticity
The property industry is highly influenced by the price and another factor which can
influence the financial decision of customer for their residential property or investment
decision (Kimberly , 2018). When it comes to real estate business they had elastic
demand for the product in the market which means a minor change in the price increase
the demand for the product in the market. The major factor which is behind the
elasticity of demand of the product is in the Interest rate of a financial institution in the
nation and Taxation policies of government for property
Interest rate is the major determinants of real estate business. As there is any change in
the interest rate which arises the funding for construction company like abacus property
and also a major impact on the cost of the project which is the price of the project. As
the interest rate goes down for the project which guides a respective decreased price of
houses in Australia and simultaneously increased the demand of the products.
Further, as the taxation policies are changes and they are in favor of the customer.
Demand is more increased in Australia. AS government provide a high rebate on real
estate and negative gearing option which attract more customer toward the real estate
market and Company can be sold their maximum product in the market ue to the high
demand of the product.
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Major event in recent time for Australian Market
Digital Finance
Digital finance is the tool which is used by a construction company like abacus property
and others to gain and acquire a quick source of fund for their liquid requirement in the
project. Digital finance is defined as the collaboration of Digital advancement with the
concepts and tools of project finance for effective control on financing activities in the
market.
Digital finance is the new superhero which changed the perspective of finance of fund
for a construction unit. This kind of change majorly impact on the supply of the product
in the real estate market and also impact on cost or price of the product which definitely
impacts on demand of the product in the Australian market for the company (Deloitte,
2018). According to the report of Deloitte vendor in current scenario face lots of financial
issues related to flexibility, long planning cycle, and other major issues which impact on
the supply of product in the real estate industry. Recent as the innovation of new
technology of financial instead of traditional financing methodology company now
acquire fund in a fast and effective manner which enable them to increase their supply
in the market.
Digital finance is the point which reconstructs the whole system of acquisition of fund
from the financial institution and also majorly influences the cost of the project which
minimized through less complexity in term of time and money. There is a positive
change in the demand of property as the price goes down and also digital finance helps
customer to purchase property ineffective and quick manner.
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Conclusion
In this report, it has discussed the market strategy for the company to enhance the area
of the company in the market or industry. The Abacus property group is the leading
diversified group in Australia. It discussed the industry performance, revenue of the
industry, employment generation, it is also contributing to GDP. The market structure is
having various types, and the abacus property is in the oligopoly market structure, this
is having the various trends to work in the market to earn the maximum profit. It
discussed the demand and supply of the company’s product that will affect the market.
The company’s product is influencing the market, the product will change the demand
and supply of the product and they are the opposite work in the process. It has also
discussed the elasticity of the company’s product and services for making the difference
and volume of the product. It makes the event on the market for getting the maximum
brand value of the company as well as industry and they contributed with their value
from the company in the event and earn a maximum profit for the future.
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