Nottingham Trent: Real Estate Dynamics in Developing Nations

This report provides a comprehensive overview of the real estate industry in developing countries, focusing on its growth, challenges, and economic impact. It explores the significance of the property sector, the factors affecting its development, and its contribution to economic progress. The report delves into the issues of fraud, corruption, and the intervention of inexperienced investors, which hinder the sector's growth. It examines the methodologies used, including data collection from secondary sources and quantitative analysis. The analysis includes diagnostic tests and discussions on data sources, sample structure, and key findings. The report also covers the aims, methodologies, and limitations of the study, offering insights into the real estate market's dynamics, and suggesting opportunities for future research.

REAL ESTATE IN DEVELOPING COUNTRIES
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Table of Contents
Chapter 1: The Introduction...............................................................................................4
1.1 The Broad field of the research................................................................................4
1.2 The specific area of the study..................................................................................4
1.2.1 The research issue............................................................................................4
1.2.2 Significance of the problem................................................................................5
1.2.3 Importance to the discipline...............................................................................6
1.3 Statement of the research aims...............................................................................7
1.4 An overview of the methodologies...........................................................................7
1.5 Structure and contents.............................................................................................9
Chapter 2: The Background............................................................................................10
2.1 A contextual discussion..........................................................................................10
2.1.1 Background to the study..................................................................................10
2.1.2 In-depth discussion of the research problem...................................................12
2.1.3 Relevance of the discussion............................................................................13
2.2 Literature review.....................................................................................................15
2.2.1 Factors affecting the development of the real estate......................................15
2.2.2 Contribution to economic development...........................................................18
2.2.3 Current status and future scopes.....................................................................20
2.2.4 Techniques and methods for improvement.....................................................23
2.2.5 Applicable theories...........................................................................................26
2.2.6 Benefits and challenges of real estate investment in developing nations.......28
Chapter 3: Methodology..................................................................................................32
3.1 Introduction.............................................................................................................32
3.2 Research questions................................................................................................32
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3.3 Research aim and objective...................................................................................33
3.4 Research onion......................................................................................................33
3.5 Research Philosophy.............................................................................................34
3.6 Research approach................................................................................................34
3.7 Research design....................................................................................................35
3.8 Population of the study...........................................................................................35
3.9 Research strategy..................................................................................................36
3.10 Research method.................................................................................................36
3.11 Sampling method.................................................................................................37
3.12 Data collection......................................................................................................38
3.13 Data Analysis.......................................................................................................38
3.14 Diagnostic test......................................................................................................39
3.15 Research validity..................................................................................................39
3.16 Research ethics....................................................................................................40
3.17 Research limitations.............................................................................................41
3.18 Reasons of adopting this approach.....................................................................42
3.19 Summary..............................................................................................................43
Chapter 4: Data Analysis.................................................................................................44
4.1 Details of data analysis..........................................................................................44
4.1.1 Discussion of data and sources.......................................................................44
4.1.2 Sample structure and size...............................................................................45
4.1.3 Principle findings..............................................................................................46
4.2 Discussion..............................................................................................................56
Chapter 5: Conclusion.....................................................................................................62
5.1 Summary of findings...............................................................................................62
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5.2 Linking with questions and literature......................................................................63
5.3 Effectiveness of the study and relevance of the findings.......................................64
5.4 Opportunities for future research...........................................................................65
Reference list...................................................................................................................67
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Chapter 1: The Introduction
1.1 The Broad field of the research
This study provides a comprehensive overview of the industry of real estate in the
developing countries. This study is large in scope for it provides extensive knowledge
regarding the geographical and legal status of the housing sector. Real properties are
confined to a specific geographical location because they are immovable assets and of
that specific area. High maintenance for real properties are substantial or tangible and
require physical ministration. Over the past years, the real property industry has
vigorously developed in some of the developing countries. The agricultural sector is the
leading industry in almost all developing country after which the real estate industry
drives maximum investment and employment. However, most activities associated with
the housing sector are still categorized into the ‘unorganized sector'. The intervention of
local developers and small contractors are largely responsible for this. The maximum
investment in the housing sectors of the real estate industry is catered by small
investors due to which it is yet to qualify as an organized sector (Squires et al., 2016).
Compared to the other sectors, the deployment of expertise, qualified professionals and
resources in the sector of real estate has been impeded which challenged its rapid
growth. This study analyzes the problems and finds specific recommendations with
which the problems could be mitigated. It is also concerned with the evolution of this
sector in the developed countries and the factors responsible for its growth.
Furthermore, this study highlights how this sector differs between developing and
developed nations.
1.2 The specific area of the study
1.2.1 The issue of research
The concern of the current study is to evaluate the growth and development of the
housing sector or the property industry in developing countries. The evolution of the real
estate industry in the developing countries has been remarkable which led to a large
number of investors in this sector through the last few years. The growth of office
buildings, shopping malls, industrial buildings, medical facilities, educational facilities,
and recreational facilities has influenced the standard of living in developing
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communities. However, investing in the real property industry could be challenging in
developing countries. Real estate requires large areas of land on which it would be
premised and the land property is unique, fixed and scarce. The existence of
competitive investment of the different sectors with varying returns on investments
compared to the housing sector could challenge the development of the real estate
sector.
The yield from the housing industry relies on several aspects like classifications of the
real estate housings on the basis of their capital outlay, location, type, risk analysis, and
analytical forecasting. These factors are generally considered by investors. Fraudulent
activities associated with transactions necessitate the involvement of professional
experts. However, in the developing countries, the intervention of inexperienced and
unprofessional small investors has led to an unorganized development of the industry.
These issues are not prevalent in developing countries because they involve
professional builders who are specifically expertise in this discipline. This study has
addressed this issue for finding ways with which it could be mitigated. Furthermore, the
prevalence of these issues hinders the growth of this sector which serve as a major
source of employment in the developing countries (Kauškale & Geipele, 2017). The
growth of this sector also influences the economy of developing countries and hence it
is important that the government addresses the issues and find ways for improvement.
The central problem is corruption which has resulted in legal issues, relinquished or
incomplete projects. It is due to the same reasons the number of collapsing incidents
are increasing the developing countries. The quality of the real property industry in the
developed countries is more stable and directed towards national development.
1.2.2 Significance of the problem
The problems that have identified regarding the development of the property sector in
the developing counties are significantly important. The real estate sector supports the
commercial development of a nation which is especially needed in developing countries.
However, the prevalence of the issues might hinder the growth of the sector and thus
affecting the economic development of the nation. In most of the developing countries,
the agricultural sector is the integral contributor to economic growth followed by the real
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property industry. The property industry is a major source of employment in developing
countries for its huge contribution to corporate development. Over the last decade, the
corporate sectors as a discipline have rapidly evolved in availing a professional
approach for meeting the requirements of the multinational corporations that operate in
a competitive environment. The corporate sectors are largely responsible for the growth
and development of a nation and therefore the problems associated with the real estate
industries are significant and require immediate monitoring.
The government must take effective actions for mitigating the issues associated with
these sectors. This study represents the factors that are influenced by the growth of the
housing sector to reveal the relevance of it in immediately addressing the issues. The
advertising of real estate in most of the developing countries is severely underfunded,
disordered and unprincipled (Glaeser et al., 2017). These factors have been responsible
for the legal suits, relinquished projects and incidences of accidents and collapses. The
rate of house mortgage is increasing as a result of this for the sectors' deficit
performance in the developing countries. Thus it is significantly required to mitigate
these issues as it could brew associative problems like unemployment and financial
distress of the lower classes as a result of high price and high mortgage.
1.2.3 Importance to the discipline
The current discipline is concerned with the improvement and development of the real
housing sectors in the developing countries. The problems have been identified by the
researcher and these problems have increased the scope of the research. It has
enabled the researcher to explore some key areas that have remained understudied so
far. The research problems have allowed the researcher to look for ways that could
mitigate the issues. It also develops the foundation on which this specific study would
be based. The identification of the research problem is relevant for the researcher is
required to address the research problem throughout the study. In fact, the entire study
is based on the identified problem. Now, the researcher would try to find a connection
between the problem and the fundamental area of the study which is the rise and fall of
the housing industry in the developing countries.
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The problems of the research have allowed the researcher to develop an extensive idea
of the dynamics in the development of real property estate. This study explains the role
of the investors in subsidizing resources into the land property on which the buildings
would be premised for increasing the ROI (Cao & Porter-Nelson, 2016). Therefore, the
researcher gains a constructive idea regarding how the profit margin could be
increased. The researcher has also been able to compare and contrast the property
sectors in the developing countries and the developing countries for the identification of
the growth factors and performance indicators. Finally, the researcher is able to connect
the different patterns for the analysis of the findings that have been obtained from
general and scientific observations. Therefore, the problems of the research are
significant to the discipline and the researcher has conducted an extensive search for
analyzing the problems.
1.3 Statement of the aims
The aim of the current research is the evaluation of the rise and fall of the real estate
industry in developing countries for assessing its growth over the last decade. The
research study aims at finding an issue for demonstrating the factors that have
consequently affected the enhancement of the housing sectors in the developing
countries.
1.4 An overview of the methodologies
Research methodology indicates at the systematic and scientific planning of the
implementation of the current research. It comprises of a set of methodologies that are
deployed for the completion of a formulated study. In the current study, the researcher
has framed planning by employing some specific methods that comply with the
requirements of this study. It determines how the researcher has collected data and
how the findings have been evaluated and analyzed for obtaining numeric outcomes.
This section provides an overview of the methodologies that have been applied in this
study for the completion of the research.
The researcher has employed the mono method intending to gather data mostly from
secondary sources. A part of the data has been gathered from the chosen sample
comprising of both commercial and residential real estate. A key parameter has been
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used by the researcher for generating property index of the countries that are labelled
as developing nations. The researcher has chosen secondary analysis of data because
this is a critical research area and individualistic opinion would not be able to cover the
broad scope. Therefore the researcher has relied on an extensive search from
secondary materials that are focused on in-depth analysis.
The researcher intends to gather fresh data for which the collected data are not older
than 2014. The researcher has collected data and information on the property index
depending mostly on the government websites that publish quarterly reports on the
property. The researcher has also gathered additional data from academic journals,
peer-reviewed articles, and other authoritative publications like government manuals,
books, and other authentic materials. The pieces of information are referred to in this
study for they strongly support the claims of the researcher regarding the housing and
property industry in the developing nations.
After the collection of data, the researcher has implemented diagnostic tests for
generating numeric outcomes. The researcher employs quantitative analysis of data
because results obtained from the quantitative analysis is less biased, less manipulated
and more accurate compared to qualitative analysis of data. The researcher has used
Durbin Watson statistics for generating autocorrelation of the variables and multi-
collinearity with the use of the variance inflation factors. The researcher has also
implemented additional tools like kurtosis and skewness for the depiction of normality.
The researcher has also used MS Excel for obtaining the outcome because data
generation on Excel is less time consuming and less complicated compared to other
statistical tools.
The next step is entailing an examination of the generated outcomes and then
implementing informed deductions and inferences on the improvement of the property
sector in the developing nations. Descriptive statistics and infernal statistics are
employed to avail the process of data analysis with the use of STATA program and
other statistical tools of analysis. The obtained results that have been derived from the
data are numeric and the accuracy is high since most information is gathered from
authentic government sources. The results also support the opinion of the author
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regarding the real estate development in developing countries where the scopes are
considerably lesser than that of the developed countries.
1.5 Structure and contents
The current research is structured in accordance to the proposal and is sub structured
into five extensive chapters that include an introduction, a background, methodology,
analysis of data and conclusion/recommendation. The introductory chapter provides a
general overview of the subject and establishes the problem statement. It also provides
a general idea regarding how the research would be executed. The second chapter
provides a constructive background of the study by providing a contextual discussion of
the matter. This chapter also a comprehensive review of the literature in which the
contextual and relevant academic literature are explored. The methodology chapter
provides a detailed description of the methodologies that are employed by the
researcher for the implementation of this research work. It also states the research
questions, aims, and objectives. The methodology chapter discusses the particular
approach to the review of the literature and the reasons for adopting it. The fourth
chapter demonstrates the outcomes of the data analysis which the researcher has
obtained with the use of statistical tools. The process of data collection is explained in
this structure. The results are linked with the objectives of the study. The last chapter
provides an overall summary and commentary on the findings and also reveals the
scopes for future studies.
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Chapter 2: The Background
2.1 A contextual discussion
2.1.1 Background
The real-estate in most of the developing countries implicit a major significance with
economic liberalization. Therefore, it resulted in an augment in labour immigration as
well as business opportunities, leading to an enhanced demand for housing and
commercial space. As opined by Cecchetti and Kharroubi (2015), it could be said that
the construction and housing sectors are contributing significantly to the overall growth
of the core infrastructure in most of the developing nations. The magnification of the real
estate industry might be linked to the progress in various industries including retail,
leisure and hospitality industry, information technology as well as fiscal services.
The real estate companies in some of the developing nations are generally governed by
multiple small players with a moderate or low level of monetary resources and
proficiency. Previously, the real estate sectors in the developing countries customarily
spouted individuals with high value and even financing was supplied unofficially instead
of promoting from institutional assets (Glaeser et al., 2017). Therefore, as a
consequence, it has led to a low intelligibility level. These circumstances in the real-
property sectors of the developing nations transformed with the development of the
industry. However, lately the dynamics of the real estate industries replicate the
prospect of the clients with superior quality and this is aligned with the rising
amalgamation of the global economy of most of the developing countries.
It has been revealed that following the slackening of the finance system in some of the
developing nationss, the industry of real property has been recovering and therefore it is
likely to make an impressive growth within the next decade. According to Rapoport
(2014), the escalation of the concerned industry might be accredited to the enhanced
power of procurement, constructive analytics, continuation of banks which are customer
affable, professionalism, companies of housing sponsorship and the flattering
restructuring by most of the government of the developing countries for attracting the
global investors.
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While real estate industries in the developing nations are not always associated with
growth and success, it has been subjected to the downfall as well (Glaeser et al., 2017).
The expansion and the improvement of the industries of real estate are generally
confined by multiple factors despite its massive potential to add to the economic growth
of these countries. It has been noticed that in most of the developing countries the
residential sectors are largely affected by dreadful pressure. The drop in sales in some
of the developing countries has slowed the process of new residential units entering the
market. As opined by Leung and Tang (2015), this has also resulted in the descending
of new projects as well. There are several other noticeable factors that largely
contributed to the setback of the real estate industries in some of the developing
nations. The loan interests of most of the houses in these developing nations are
exceptionally high and this is probably an integral reason behind this setback. As opined
by Cecchetti and Kharroubi (2015), most of the developers fail to provide the companies
with timely possession of the housing projects. The approval and the agreement
process are not only lengthy, but the processes also meet with multiple obstacles.
The supply line of the real estate industries is largely throttled and the funding lack
appropriate organization as well and these are some of the major looming factors
behind the setback. There has been deflation in the currency of some of the developing
countries and pieces of evidence of political impasses has been noticed as well.
According to Rapoport (2014), due to the extreme competition in some of the prime
cities in the developing nations, the quality of construction activities are largely affected.
Urban sprawl or the migration of people to the urban areas from the rural areas is
practised extensively in the developing nations and due to this, the housing demand has
enhanced rapidly, however, supply in these countries is restricted and inadequate to
meet the demands. As opined by Leung and Tang (2015), a number of players in the
real estate industries have been subjected to illegal practices regarding the promotional
activities of their projects. There are a number of developing nations which lack
regulatory bill as well as policies of national real estates.
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