Property Economics & Property Market Analysis Case Study - Accounting and Finance Assignment Help

Assignment Task:

Task:

Part 1 (Total 20marks): Property Economics & Property Market Analysis Case Study
Read this news article: “Stability expected for new housing”, was written by Madelin Hayes, published 03 May 2021 for The West.
Web link: https://thewest.com.au/lifestyle/real-estate/stability-expected-for-new-housing-c-2725115
Note: Contact Unit Coordinator via email if you are unable to view the article online.
Research the concepts and topics presented within the news article above and then critique the article using your knowledge of statistics, property economics and property market analysis developed within this unit. *Hint: You should cite external sources to support your critique.
Type your answers below. (20 marks) Guide: 600 words

Part 2 (Total 20marks): Property Finance Case Study and Essay
Create your own realistic property finance case study using the table below with a 1 year analysis period. Choose a residential investment property in the Perth Metropolitan area that is available for sale now from www.realestate.com.au. Provide the full web link of the property you have chosen below. Do not use examples from this unit’s learning materials. (8 marks)
*Hint: Use a real residential investment property available for sale as an example and pair it with real rental incomes of similar properties available for rent as the cash flow. Make realistic assumptions about prices, appreciation in value and interest rates for residential investment properties. Your debt component should be between 60% to 80% of the property’s initial value. Fill in the table below with the variables you have chosen and complete the analysis.
Web link of chosen property: *Insert your property’s web link here*
 Complete this table Property Levered Equity Debt
Initial Value Cash Flow Ending Value Income Return % Appreciation Return % Total Return % Part 2B next page
Analyse and report on your findings from your case study from Part 2A on:
the total return of the property, return on equity and return on debt;Type your answers below. (6 marks) Guide: 250 words
the overall positive or negative outcomes of leveraging in your case study.
Type your answers below. (6 marks) Guide: 250 words

Part 3 (Total 20marks): Property Development Case Study and Essay
You are planning to develop a 20 hectare (200,000 m2) site for residential use. 10% of the site will be set aside for public open space. 27,000 m2 will be left vacant for future provision of a shopping and commercial precinct. Infrastructure works such as roads, pavements etc. will cover another 20% of the site. The remaining land will be subdivided into residential lots of various sizes described in the table below.

• Lot Size (m2) Number of Lots Comparable Sales Price (per lot)
• 200 65 $154,000
• 350 52 $217,000
• 400 73 $231,000
• 500 50 $274,000
• 600 46 $321,000

The land covered by residential lots will cost $247 per m2 to subdivide. The site for future shopping and commercial precinct will cost $52 per m2 to prepare. Open space will cost $55 per m2 to prepare. The infrastructure works that cover 20% of the site will cost $105 per m2.
Your bank is prepared to fund 60% of total development costs. The cost of the loan will total $1,020,000 over the duration of the project. Taxes (land tax, stamp duty) and additional infrastructure works such as power and water charges will cost a total of $2.75m. The land is currently available to purchase for $55 per m2.
Complete the following sections based on the scenario provided above.
Complete the static feasibility table below based on the scenario provided in Part 3.
(8 marks)
REVENUE     $
GROSS DEVELOPMENT REVENUE $
Sales fee @ 3% $
Marketing Costs @ 4% $
Net Development Revenue    
  $
COSTS 1. Subdivision Costs $
2. Other Construction Costs $
Contingency (% of 1+2 above) @ 4% $
Professional fees (% of 1+2 above) @ 4% $
Infrastructure Contributions and Taxes $
Land $
Land acquisition costs @ 6% $
Finance on Bank Funded Costs $
Total Costs     $
DEVELOPER'S PROFIT $
DEVELOPER'S PROFIT ON COST %
If the developer funds 40% of the total cost of the development, what is the total return on the developer’s equity? Show your workings below and the result in 2dp %. (4 marks)
Show workings (calculations) below:
Total return on developer’s equity = %

It is anticipated that it will take 12 months to deliver this development project. Discuss the profitability of this development project (over the 12 month period). Then discuss what would happen to profitability if this project faced delays that would push completion to 24 months.
Type your answers below. (8 marks) Guide: 300 words


Part 4 (Total 20marks): Property Valuation Illustrated Essay
Explain the difference between investment value and market value in detail. Develop a numerical example to illustrate the difference. *Do not use examples from learning materials as you have to create your own*
Type your answers below.(10 marks) Guide: 400 words
Identify the valuation method that would be most appropriate to use for an income producing commercial property in Perth, Western Australia. Then explain in detail why you have selected this method.
Type your answers below.(10 marks) Guide: 400 words

 

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