A Perfect Storm for Property Prices (Essay Sample)

A PERFECT STORM FOR PROPERTY PRICES
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A PERFECT STORM FOR PROPERTY PRICES
Property Prices
Australia has some of the highest land rates in the world. Contently, this has also seen Australian house prices go up. The business domain has equally had a negative bearing as a result. The spirit of competition among firms has dwindled away; this is evident in companies like Holden and Qantas. A litany of factors is also at play; the Australian government for instance has been formulating laws that restrict spatial growth although it enhances urban renewal in the sense that the cityscape modernizes to provide present facilities and maintain the old order. The political class is also to blame of the poor land-use policy, because politicians are playing to the demands of developers and the anticipations of the community. Community facilities have been sacrificed at the expense of the elephant in the boom (Kohler, 2013).
Real estate means an input cost for the business world, which implies that the higher it gets, the business becomes less competitive. Escalated real estate costs are hurting Australia’s financial system. Cutting down taxes and less control will even jeopardize the lives of millions and the economy at large. Thirty percent of the real estate is controlled by speculators that capitalize on capital gains to accrue revenues or break even. In the event that prices do not go up, money will be lost and many organizations are likely to go under receivership. Most retirees will end up bankrupt. This backdrop is highly likely to impact on the many opportunities on the long run owing to diminishing value in various improvements. According to the article, the advent of technology and globalization has altered the game to the disadvantage of both developers and the market, because it has made reality development rather unpredictable (Kohler, 2013). . The internet for instance, has the propensity to leak ones ideas hence impeding the creation of a sheltered lucrative market, because competitors will always lower your earnings. In a nutshell, globalization is about leveraging off to the common denominator, in this regards developed nations like Australia will start drifting a back while underdeveloped nations will move forward. In the end, all nations developed and underdeveloped will meet at the epicenter of corporatocracy. Excluded real estate development is messing up the industry costs by making homes playthings of global investors; some might not understand how messy the market seems. In a nutshell, it is simply one gigantic lie that is denying Australians of homes while forcing up living costs and wages (Schuknecht, Hagen & Wolswijk 2009).
Government Economic Policies and Contribution To The Current Situation
The government in Melbourne has authorized the local government to enforce restrictive planning zones that stop high-density housing in suburbs and hence control apartments in the thinning regions surrounding the city. In addition, the government has started plan Melbourne that recommends about three hundred and ninety three new housing in well-known suburbs and 200,000 dwellings in the extended inner city, this aimed at making housing reasonably priced. However, this move is currently being sabotaged by local government (Carter, Yao & Deininger 2000). In particular, the local government has the right to enforce ‘Neighborhood residential zones in many suburbs. This is basically to restrict development to at least two housing per given lot and a variety of firm structural design control, successfully prohibiting uptown blocks similar to those developed in the 1960s that are common in many suburbs (Reinhart & Rogo...