Property Assignment Harvard Case Solution & Analysis

Question 2

 1.Transaction Volume

 

 Since the high powered money supply is increasing over the years and financing is becoming cheap therefore, the transaction volume would increase significantly.
2.Property Price

 

The graph of the 1-month HIBOR shows a declining trend from March 2007 to December 2009, therefore, financing becomes cheap and as a result the property prices would decline.
3. Property Yield

 

 

Since the cost of the properties would also decline due to cheap financing therefore, the yearly returns or the property yields would also decline significantly.
4.Asset Risks

 

The risks associated with the asset would increase because of the declining HIBOR and the increase in the high power money supply.

 Question 5

            The supply and the demand of the private domestic property can be evaluated and assessed through a number of factors as mentioned in the population and vital statistics and supply of private domestic property. First of all, if we look at the vacancy rates for the occupancy of the leasehold properties, then it could be seen that the vacancy rates are increasing consistently and significantly. The vacancy rate for the private domestic properties of less than 100 square meters and also for properties of more than 100 square meters is increasing continuously. However, the increase in the vacancy rate is much higher for the properties of more than 100 square meters than those properties which are less than 100 square meters. This shows that the demand is decreasing.

            If we look at the information that has been provided in the population and vital events section, then the growth of females is much higher as compared to the growth of the male’s population. The acquisition of the property is mainly done by the males; however, as their population is decreasing the demand for the property would also decrease significantly. Furthermore, the acquisition of the property is mainly done by the people between the age group of 15-34 and 34-64 years.

            However, if we look at the population growth rate of people within the age group of 15-34 years, then it is decreasing whereas, the growth in the population for the people within the age group of 34-64 years is increasing but at a lower rate. This would again show that there is going to be an oversupply of the private domestic property and the demand for the private domestic property is going to decrease significantly.Project Case Solution

            Also, if we analyze the natural increase rate in the population, which is the total births less total deaths, then it could be seen that this rate has fallen significantly. Finally, if we look at the vital deaths statistics then the number of the total births is decreasing, the crude birth rate per 1000 population is not changing, the number of deaths is increasing and the number of the households is increasing but not at a significant rate. This all shows that there is an oversupply of the private domestic property in the market and this is because the demand for the private domestic property is declining in the market because of the range of factors as described previously. ..........................

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