Relationship Between House Immigration Rate Essay

Questions:

What Is The Relationship Between The House Pricing And Rate Of Immigration?

What Are The Factors That Influence Immigration And The Pricing Rate Of Houses?

What Is The Rate Of Change In Between Supply And Demand Between The Years 2000-2010 And 2011-2017?

What Is The Relation Between Pricing And Immigrations In That Have Changed Throughout Times In Different Countries?

Answers:

Introduction:

In the last two decades, the migration that have happened internationally and the migration that happened with the help of VISA have affected the prices of housing in countries all over the world (Brettell et al., 2014). This particular review of literature will focus upon the figures of migration rate and prices of house that has changed over time from 2000-17 in various countries around the world. There are two kinds of immigration that happens in the world, the first is the legal immigration which happens when an individual takes proper VISA and all the legal papers to travel to another country while illegal immigration is when an individual crosses border to enter another country without the consent of the country to which he/she is entering. From time to time these things have affected the prices of housing in the countries and this literature will deal with the house pricing all over the world that has changed due to these factors since 2000 till the present times (Geddes et al., 2016).

House Prices and Immigration rate Relationship:

While it is compared to the context of the nation, it can be found that there exists a positive correlation between the prices of the house and migration rate. As stated by Sa (2015), when the price of house increases with immigration, it is expected that the price of the rate of immigration will rise more during the future period of time (S?, 2015). He further extended that it can be stated that there is an affirmative co-relationship that exists between the rising of house prices in a country and the rate of immigration to that of country. When the immigration of a country rises at national level, then automatically the prices of the house also increase. As it has been stated by Wadsworth et al. (2016), with the help of First Economy Theory application, the rise of household income can give a rise in the price of house and along with that there are certain other factors that can contribute to that rise and they are pricing of compliment products and also the pricing of substitute goods, which in this case are the flats and mortgages (Wadsworth et al., 2016).

As stated by Saiz (2008), even if there is high demand for house inside the country, when the rate of immigration is low, it can cause downfall to the housing prices. For instance, according to Shi et al., (2015), the citizens of the country and the long term immigrants while contribute 0.1% of the income to the country while the natural population boost contributes 0.8% to the country’s economy (Riley et al., 2015). But other studies states that if there is 1% increase in the population of the immigrants the rate of house increases by 12.6% in the country. The relation that exists between the immigration and the rise in house pricing can be seen from the table in Appendix 1.

The inflation in the prices of house is mainly due to the migrants and they contribute towards a nation’s economy with the help of creation of inflationary pressure (Ferrero, 2015). Also rise in the house prices in a country contributes towards domestic spending and also drives up the prices of domestic goods. Shi et al., (2015) stated that how the mortgage raised the price of houses during the 2008 financial crisis and during this time, there were many immigrants that have entered NZ for the demand of houses in fewer prices. (Appendix 2)

Immigration rate and house pricing rate relation in different countries:

When there is a national debate in the topic of affordability, demand and supply, the reduction rate in the supply and demand of houses is bound to arise (Gonzalez et al., 2013). According to Accetturo et al., (2015), he stated that the prices of house vary from country to country and the rate of immigration in those countries determines the prices of house. He further explained that how the prices of house vary from different cities within the same country by drawing the example of Melbourne and Sydney. While in Melbourne in the year 2016, the house rate was 10.8%, in Sydney it was much lower which was 10.3%. Thus it had reduced the Darwin Prices by 1.5% and there was a major gap formed between the income of individuals and the prices of house which had a huge effect upon the Reserve Bank of Australia. As stated by Bell et al., (2013), the decision of the migration of individuals is not only based upon the income factor but also upon the Labour market, credit market as well as insurance market (Bell, 2014). It has been found that Australia was facing a major downturn in the economy of the country between the years 2015 to 2016 and that had force raised the cost of housing in the country. Also the rate of unemployment was high in the country and these consequences raised the price of the house as well as there was a steep fall in the demand for houses in the economy. This scenario in Australia has forced a huge number of people to immigrate in the country as the demand for the house was low and the prices were falling down. Head et al., explained that there were a large number of natives who left the country under this scenario and also a large number of immigrants who came to the country for the same purpose (Flynn, 2013). Thus, these factors controlled the population of the country though the structure of wage was lower as well as employment. (Appendix 3)

While stating about the situation of UK, it can be found that immigration helped in lowering the prices of the house in the country. As stated by Borjas (2014), the rate of immigration as well as the demand for houses has increased in UK at a high rate and as the statistics says, in the coming 10 years, the housing price will also go down by more 10% in the country. Also, as the rate of income is getting lowered in the country due to immigration, the demand for house might also go down due to this fact. In the year 2016 there were a large number of natives (134,000) and immigrated people (206,000) left UK which has lowered the prices of house from 9.3% (June) to 6.9% (October). (Appendix 4)

Also there are a lot of initiatives that have affected German market and it has been sated that in future, the demand for house will raise more as the immigrants are increasing in the country. This will make the price go up in future times (Ferrero, 2015). Hyman (2014) stated that in Germany 1% population rise of the immigrants is causing to raise the prices of the house by 3.5%.

Relation between the immigration rate and house price:

In the last 20 years the economy has changed overtime and the market for housing had a huge impact. The rate of immigration as well as migration in New Zealand had a huge impact on the prices as well as in the demand for houses (D’Amuri et al., 2014). While the citizens of the country and the long term immigrants while contribute 0.1% of the income to the country while the natural population boost contributes 0.8% to the country’s economy. It is also a fact that in the year 2002-2003, migration has increased in the country and it has given rise to 12.6% in the housing price while only a small rise of 1% happened to the population. (Appendix 4)

The prices increase when the demand for an exact property is high in the market. While there is reduction in the demand of housing, there will also be less cost of the houses in that particular market which can give rise to the immigration in that country as stated by Wadsworth et al., (2016).

Immigration Rate and House price between the years 2010-2017:

The immigration level has increased in countries of Europe due to war breakout in Syria and as stated by Bell et al., (2013), 13.5 million citizens of Syria received humanitarian help due to the war. In Europe, itself, between the years 2013 to 2015, the number of immigrants leaped to 932,000 from 296,000 (Zong, 2015). That is the reason behind shortage of supply of foods as well as huge demand for housing. The largest immigrant population in the world was from Syria and they have migrated to the neighbouring countries which have made the shortage of supply of all kinds of resources. (Appendix 7)

Also policies like Brexit had a huge impact upon the migration as well as the demand for the house in UK and other neighbouring countries. As UK decided to leave EU in 2016, the number of immigrants reduced in the country to 246,000 which has affected the house pricing in the country as well as the demand which fell down due to the fact that demand was less (Ackrill, 2016).

Gap in Literature:

All the research that has been made formerly consists of the relation between the housing price and immigration which have affected the countries economically. But some points were missing for, most of the researches which are; main change in economy in the last two decades which have affected the housing market. Also, the Great Recession of 2008 is also one of the major determinants of housing price change (Kaplan et al., 2015). This was the scenario from 2000-2010 while coming to the scenario of 2011-2017, it was found that significant downturn of this period has made the house price go up and had an effect upon the supply and demand of housing.

Research Design and Methodology:

The secondary data will be collected from a variety of online as well as offline sources in order to perform this research (Best et al., 2016). Internet will be used as a medium in order to collect the secondary data which are qualitative data in nature. Also, online peer reviewed articles, journals, online libraries, will be accessed in order to collect data from the online sources. Books, magazines, newspapers will be used as an offline sources to collect data from the sources that are offline in nature.

Reliability and validity of the research:

In order to perform this research, the researcher has followed all the ethics that are connected to the research. In order to make the research valid as well as reliable, proper referencing was done to provide the credit to the early researchers who have made the hard work to mention the data in the researches (Johnston et al., 2016).

Data Collection Method:

Secondary data were collected from various offline and online sources that includes peer reviews articles, books, online libraries, journals, newspapers as well as magazines. These data were collected on the basis of past researches that were made in this particular topic by the researcher.

Research Limitation:

While working in this research, there were a variety of constraints that were faced by the researcher (Flick, 2014). Firstly, this is a time consuming research and as the time was limited in the hand of the researcher, the time constraint was faced on the first instance. Secondly, there were ethical constraints that were faced by the researcher as the research was conducted obeying the ethics, there were many data that were left out which could have had a significant effect on this research. Lastly, there was finance constraint that the researcher faced during this research. As there were many articles in the internet which requires money for access purpose, the researcher had to leave out those articles.

Time Frame:

The first week was used by the researcher in order to select the topic for the purpose of research and the researcher had to go through the internet in order to select this topic, while the second week was used for the purpose of collection of data from which the literature review was prepared in the 3rd week of the research conduction. In the 4th week, the plan of research methodology was prepared and the selection of appropriate data was done in the 5th week. 6th week went for analyzing and interpreting the data regarding the research while in the 7th findings regarding the research was prepared. Lastly, in the 8th week, the final project was made ready by the researcher.

Conclusion:

The discussion that has been made above helps to know the researcher regarding the correlation and relationship that exists between the immigration and the pricing of house in the economy and how the rising of immigration gives rise to the prices of house in a specific country and vice versa.

References:

Adelino, M., Schoar, A. and Severino, F., 2015. House prices, collateral, and self-employment. Journal of Financial Economics, 117(2), pp.288-306.

Brueckner, J. and Lall, S., 2015. Cities in developing countries: Fueled by rural-urban migration, lacking in tenure security, and short of affordable housing. Handbook of regional and urban economics, 5, pp.1399-1455.

S?, F., 2015. Immigration and House Prices in the UK. The Economic Journal, 125(587), pp.1393-1424.

Brettell, C.B. and Hollifield, J.F. eds., 2014. Migration theory: Talking across disciplines. Routledge.

Geddes, A. and Scholten, P., 2016. The politics of migration and immigration in Europe. Sage.

Wadsworth, J., Dhingra, S., Ottaviano, G. and Van Reenen, J., 2016. Brexit and the Impact of Immigration on the UK. Centre for Economic Performance. LSE, pp.34-53.

Riley, S.F., Nguyen, G. and Manturuk, K., 2015. House price dynamics, unemployment, and the mobility decisions of low-income homeowners. Journal of Housing and the Built Environment, 30(1), pp.141-156.

Ferrero, A., 2015. House price booms, current account deficits, and low interest rates. Journal of Money, Credit and Banking, 47(S1), pp.261-293.

Gonzalez, L. and Ortega, F., 2013. Immigration and housing booms: Evidence from Spain. Journal of Regional Science, 53(1), pp.37-59.

Bell, B., 2014. Crime and immigration. IZA World of Labor.

Flynn, M., 2013. The hidden costs of human rights: The case of immigration detention. Browser Download This Paper.

Ferrero, A., 2015. House price booms, current account deficits, and low interest rates. Journal of Money, Credit and Banking, 47(S1), pp.261-293.

D’Amuri, F. and Peri, G., 2014. Immigration, jobs, and employment protection: evidence from Europe before and during the great recession. Journal of the European Economic Association, 12(2), pp.432-464.

Zong, J., 2015. Profile of Syrian Immigrants in the United States. Migration Policy Institute.

Ackrill, R., 2016. Brexit and immigration: some questions that need answering. The Conversation.

Kaplan, G., Mitman, K. and Violante, G., 2015. Consumption and house prices in the Great Recession: Model meets evidence. Manuscript, New York University.

Best, J.W. and Kahn, J.V., 2016. Research in education. Pearson Education India.

Johnston, R.B., Reimers, K. and Klein, S., 2016. Performing Research Validity: A “Mangle of Practice” Approach. In Beyond Interpretivism? New Encounters with Technology and Organization: IFIP WG 8.2 Working Conference on Information Systems and Organizations, IS&O 2016, Dublin, Ireland, December 9-10, 2016, Proceedings (pp. 201-214). Springer International Publishing.

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