Contact Us
Sign In / Sign Up for FREE
Go to advanced search...

How a Decline in Economic Growth Affects Property Markets - Research Paper Example

Comments (0) Cite this document
The author of the following paper states that the construction industry is one of the main indicators of economy and contributors to the GDP. Hence slowing down of it could take the economy to recession. The present article is an effort to see the impact of one of its main sector…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER94.7% of users find it useful
How a Decline in Economic Growth Affects Property Markets
Read Text Preview

Extract of sample "How a Decline in Economic Growth Affects Property Markets"

Download file to see previous pages The costly credit and impact of inflation made retail suffer badly in 1990. In the major UK cities, low-income people hindered from entering into property market due to high-interest rates. As a result, there was an overall slowdown in the activity. There was a decrease in institutional property investment and returns reduced on retail investments. Schemes for new large stores were shelved or even canceled while existing store outlets were scaled down or closed in a bid to attract larger customer share from competitors. The picture was total contrast from the 1980s when companies invited the big names in retail developers to design unique themed malls on the latest retail and leisure ideas (Jacobs 1992:93). Thus the slump of property and construction industry provided an example as to how fast the market-led growth falls. The recession affected even the most promising construction schemes as their ratings were down and billions were wiped off the share portfolios. It was a blow to Thatcher's vision of a Homeowner's nation. (Jacobs 1992:94). Jenkins (1991 as incited in Jacobs 1992) finds a cyclical nature of the UK property industry. He studied the property market from 1960 and found that there was increased involvement of banks and pension funds with the property market. ...
The property was then presented by developers as security to obtain bank loans (Jacobs 1992:95). The multinational companies have integrated the economies of different countries and changes of one nation are transmitted to others. At the same time, there are more stable interest rates and low economic volatility. But the low inflation puts the lender at risk of default while borrower may have some advantage ( Forest and Lee 2003: 163).
The property companies were also helped by the bull market which increased their funds needed for development. By 1991, the overseas banks had 43% funding of property industries. The property slump occurred as a result of the entry of foreign capital which made this sector vulnerable as it was dependent on borrowing (Jacobs 1992).
The current slump in the economy has affected the construction industry as can be assessed by a comparative account of construction and GDP. The latter is the most important indicator of a nation's economic health but likely to decline by 2.9 percent in real terms over 2009 (The Centre for Economics and Business Research (CEBR)). It will be the biggest annual fall since 1946 when the country faced mass demobilization after the Second World War. It is forecast that industrial investments may decline by more than 15 percent in 2009 and pose the biggest risk to the economy while household expenditure is expected to come down by 1.8 percent in the Year.
The issue is that house prices started to fall even before growth started to slow down. In other words, there are many microeconomic factors reducing house prices. Therefore, the fall in economic output has aggravated these other factors that are now causing lower house prices. ...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
(How a Decline in Economic Growth Affects Property Markets Research Paper, n.d.)
How a Decline in Economic Growth Affects Property Markets Research Paper. Retrieved from
(How a Decline in Economic Growth Affects Property Markets Research Paper)
How a Decline in Economic Growth Affects Property Markets Research Paper.
“How a Decline in Economic Growth Affects Property Markets Research Paper”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF How a Decline in Economic Growth Affects Property Markets

Understanding Property Markets

Understanding Property Markets

On the other hand, real GDP is computed by dividing the nominal GDP by the price index or inflation for that year. That makes it real because it is being adjusted for the price level at the time of measurement. The pattern of nominal and real GDP showed that there was an increasing GDP from 1948 to 2008 but a little decrease in the next years. The gap between the nominal and real GDP shows the difference in the price level over the years. As the graph shows, the large gap between the red and blue curves means that there was a high rate of inflation during those years. So, when even if nominal GDP is reported at high volumes, once it is adjusted to the high price index it will result to lower...
3 Pages (750 words) Essay

Economic Portfolio - Economic Growth

... Economic growth: In every economy, there are always four main macroeconomic objectives which are, price stability, economic growth, balance of payment and full employment. To achieve this objective, both fiscal and monetary policies have to be implemented. Normally for any particular economy, both social and political problems are the key factors relevant in achieving all the four objectives. Fiscal policy refers to expenditure and taxation policies central government, that are implemented by the ministry of finance through special agencies, directly or through area ministries, where as, monetary policies are the government’s regulations of the interest rate level and money supply in the economy. Usually, the monetary policy is executed...
3 Pages (750 words) Coursework

How the theory of supply and demand affects activities in the property markets

...? How Demand And Supply Affects Activities In The Property Markets Executive Summary The concepts of demand and supply underpin the very basics of economics. In a free market economy, demand and supply interact with each other to determine the market equilibrium i.e. a price at which the quantity of goods demanded equals the quantity supplied. The property market also operates in somewhat a similar manner. The main factors outlaying the demand for property include the demographic structure of a society along with the level of disposable income. Interaction of the supply and demand curve for property determines the value of the property in this case. This report goes into great detail to explain the basic economic concepts of demand...
6 Pages (1500 words) Essay

Economic Growth

... Theory: An Exposition, Oxford University Press, Oxford. 11. Temple, J. (1999), ‘The new growth evidence’, Journal of Economic Literature 37(1). 12. Barro, R. J. (1974), ‘Are government bonds net wealth?’, The Journal of Political Economy 13. Stevenson, A., Muscatelli, V. & Gregory, M. (1988), Macroeconomic Theory and Stabilisation Policy, Philip Allan. 14. Nickell, S. (1997), ‘Unemployment and labor market rigidities europe versus north america’, The Journal of Economic Perspectives 11(3). 15. Nickell, S. (1998), ‘Unemployment: Questions and some answers’, The Economic Journal 108(448)....
7 Pages (1750 words) Essay

Economic Growth

.... As a result, less is available for spending on investment opportunities thus leading to slow economic growth. Moreover, with increment in government on infrastructure and other facilities, taxes will rise hence straining the working population wages to the extent that they will have less to spend on economically productive activities thus leading to slow economic growth (George, 8). Externally, Singapore faces competition from other established nations like China, Asia and Germany. Singapore is finds it difficult to cope up with such nations since it has limited resources to produce its exports as compared to these neighboring nations. Due to this, it owns a little share for its GDP in the global market as compared to these neighboring...
8 Pages (2000 words) Essay

The Economic Growth of China and Decline of the West

The Economic Growth of China and Decline of the West
The China’s economic growth will not lead to the decline of the West because it is not institutionally strong and flexible as the west. The Chinese economy is characterised by intense air pollution. The World Bank indicates that 16 of 20 cities with the worst air pollution globally are in China (Joint Program on the Science and Policy of Global Change, 2012). Air pollution costs the Chinese economy significant amounts of resources that are lost to labour and increased health care costs, thus resulting in a lower GDP (Weston, 2004). The level of reduction of air pollution may be very insignificant in the coming years since the Chines economy depends on the heavy industry, met...
2 Pages (500 words) Essay

Reasons for Decline of Superannuation Fund

The growth in assets has been negative but the investments in other funds such as cash and fixed assets remain strong and gave benefits. However these benefits are outweighed by losses in other investments, such as shares, and the portfolio of investments registers negative growth. The investment market is volatile and subject to change, and when the markets go down, there is also a time for recovery. But can the superannuation pensioners afford to wait?

The Australian superannuation fund has been through significant developments in the past 10 years It was financially strong and well placed before the global crisis. However, the industry has been shaken, like others in the world, by the financial crisis. The industry e...
10 Pages (2500 words) Coursework

Bernard Madoff : A Scapegoat of the Economic Crisis

Darwin was condemned and treated with contempt by the Church for proposing the theory of evolution that linked all living matter in the earth, including humans. In the case of Bertrand Russell, he was imprisoned as a conscientious objector, for expressing his opposition to British participation in the First World War. These are typical examples of people being wrongfully punished when they were guilty of no crime or fraud or misdoing. It would be highly improper to associate Bernard Madoff with the aforementioned luminaries, for he was truly guilty of carrying out the biggest financial fraud in modern history. At the same time, it would be simplistic to classify him as a victim of the contemporary judicial system. The truth, in fa...
6 Pages (1500 words) Assignment

Economic Models: The Free Market and The State Owned System

The free market concept is mainly a theoretical concept as every country, even capitalist ones place some restrictions on the ownership and exchange of commodities (Free market economy). Therefore, the term free-market economy primarily means a system where the buyers and sellers are solely responsible for the choices they make. It gives the buyers and sellers the power to do business without being afraid of any regulations and intervention by the state. Hence, a free market gives the absolute power to prices to determine the allocation and distribution of goods and services (Free Market Economy). The pricing mechanism is in turn, driven by the forces of demand and supply of goods and services. Demand and supply of...
9 Pages (2250 words) Case Study

Economic Analysis on BMW Cars in the US Car Industry

Mini and the 1-series rapidly grew at a much higher rate through 2008. Since the early days of the new millennium, BMW has been one of the first automakers to utilize flexible factories in which more than one vehicle model could be produced at the same time. This enabled the company to meet shifts in market demand more effectively than BMW’s competitors could. BMW challenges to retain its market position in the international market for luxury cars. Many automakers, such as Hyundai with its Genesis sedan or Nissan's Infiniti brand are increasingly successful in realizing higher margins earned on luxury vehicles. BMW is rated behind luxury brands such as Lexus, Porsche, Mercedes, and Infiniti for these reasons

1. Th...
7 Pages (1750 words) Case Study

Globalization and World Economic Forum at Davos 2010

... increase in the income of women which is expected to be $5.1 trillion by 2013. By earning more and influencing purchase decisions, women have acquired greater power in the market place. There is a greater emphasis on building vibrant business ecosystems that harness a shared foundation of technology and knowledge to accelerate growth and innovation (Tapscott, 2010). The Chinese exuded greater confidence than ever before and flaunted their economic performance. A visible signs of power shifting to east particularly China were clear and loud. Whether this shift will lead to cooperation or confrontation is a question that hovers on the western and American political and business mindscape. The projections were however marked by cautious...
7 Pages (1750 words) Coursework

Introductory Economics and Finance: Why Governments Regulate Firms and Markets

By government regulation, it is meant by the rules administered by a government or government agency to influence any economic activity which determines the price, types, and standards of products, and most importantly the conditions under which the entry and exit of the firms are possible.

Like death, it is impossible to keep away from regulation in about every aspect of daily life. The business regulation may be classified into two- economic and social (Litan). The economic regulation deals with price controls and the entry limits of the firms into markets. The second type regulation mostly deals with externalities (the outside influences of the company or firm which may or may not be decided by them)

6 Pages (1500 words) Assignment

Evaluating the Nature Of Co-Ownership of Property and Trust Relationship

Technically, the rule on implied sharing in the property emanates from the assumption that the people involved in the transaction are partners. The rights of the parties in an implied partnership and sharing of the property need to be defined to determine the just share of the parties. According to Lord Bridge in the case of Lloyds Bank v Rosset1, to determine the sharing of the property, there is a need to establish the kind of agreement that the parties have over their affair. To do this, the court said in the case of Lloyds Bank v Rosset that we must look into the conduct of the parties when it comes to “sharing the house as their home and managing their joint affairs”2.

According to Lord Bridge in the ca...
6 Pages (1500 words) Case Study

The Trends in the Steel Industry and How It May Impact Nucor Corporations Strategy

The whole organization at Nucor’s revolves around the laid principles and focus on reinforcing to the extent that the organization is known for its culture and quality. Simultaneous quality checks and adherence are also as important building a strong culture for the organizations.

Nucor Corporation has always tried to challenge itself for further progress and to keep abreast of the industry of steel business.

Let us look at the trends observed in the business of the steel industry. The trend in the steel industry is very dynamic and always impacted by internal and extraneous factors. For almost 50 years the United States of America reigned in the industry of steel production, almost half of the entire p...
8 Pages (2000 words) Case Study

The 1846 Invasion into Mexico by the U. S.: The Political and Economic Forces that Brought about the Invasion

Some of the territories led to a war with Mexico from which the United States emerged victorious, expanding its territories and decisively establishing its dominance in North America.

President Andrew Jackson led an example of an administration that set the stage for the way in which James Polk would lead. In 1817, as a still yet military leader, Jackson led the United States into the first of three conflicts with the Seminole Indians from which the acquisition of Florida from Spain would be negotiated and finalized. The situation with Spain was tenuous and should have been dealt with in a diplomatic and cautious manner, but in 1817 President Monroe wrote a letter to General Jackson stating that “Great interests...
8 Pages (2000 words) Article

How Do Customers Assess Service Quality of Retailing Websites

Given the emergent nature of online commerce, it is a tough task for retailers to develop a website that meets all expectations from consumers. This view is supported by a survey conducted by the UK’s largest e-consultancy Cap Gemini. The survey identified several key disadvantages for online shoppers. Some of these include “’ Availability’, ‘Can’t be in to receive delivery’, ‘Premium charged for delivery’, ‘Can’t see or feel the merchandise’, etc.” (Quader & Quader, 2008) These are not trivial complaints by any means and despite the e-retailing industry setting foot into its third decade in existence, there are no satisfactory solutions found for th...
6 Pages (1500 words) Literature review

Microeconomics - The Property Markets

.... The people were now unable to pay for the properties and most of them were also subject to the prepayment penalties. The only hope out of this situation was to be able to move out before any more money was lost (Shurick and Weir). Assistance to Home Owners: With the major decline in the markets, the home owners were the most effected and along – side the entire economy was seeing a major decline. The government then needed to step in and bail people out of the issue. It was here that the government agencies took steps and initiatives to help the people who were directly affected and were in the lending mess. A number of different programs were set up and aid was provided to the home owners in need. The government also assisted the home...
6 Pages (1500 words) Term Paper

How Government Expenditure Affects Economic Growth

This paper will explore the question: what are the effects of federal government expenditure on economic growth? It will focus on exploring how government expenditure affects economic growth. This research will endeavor to look at the statistics on the federal government spending pattern and economic growth during different times, in order to test the above-named thesis.
Though government expenditure results in both positive and negative economic implications on the USA economic growth, negative effects are more conspicuous. The paper will focus on both positive and negative effects of government expenditure in the United States of America economic growth. The paper will be seeking to answer the question “What would be...
6 Pages (1500 words) Case Study

How Economic Conditions Affects Obesity

... Research question: How economic conditions affects obesity POLITICAL Kersh, Rogan, and James Morone. "The politics of Obesity." politics and public health (2002): n. pag. Web. Kersh and Morone in their well written “The politics of Obesity” discusses how the American politics intervenes in the private behavior of the natives of the country in tackling problems such as obesity. The politics of the American government plays an important role in controlling the food habit of the nation. The article gives intricate detailing of the mass movements against liquor however it is evident from the read that obesity politics failed to gain as much momentum in the country. However political response to obesity has been triggered by the Government...
10 Pages (2500 words) Annotated Bibliography
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Research Paper on topic How a Decline in Economic Growth Affects Property Markets for FREE!

Contact Us