OMGT1039 Assignment 1

OMGT1039 Assignment 1

Assignment type: Case study, Individual Assignment

Due Date: TBA

Word count: 1500 words

Learning Outcomes: CLO1, CLO2, CLO5

Weighting: 20%

Feedback mode: Written feedback provided together with the assessed work.

Task: Use your knowledge on forecasting to answer the case questions.

Case study: Melbourne Housing Price

An overview of housing market in Victoria shows that housing prices have been increasing over last decades. There are many factors which affect the value of a property such as supply and demand, interest rates, location, economic outlook and many more. In this assignment you will work on some real data and using forecasting techniques discuss about the price of properties in Melbourne and the factors which might affect the housing price. For the first step, you need to download three different data files. Please see below for detailed instructions.

Instruction on how to access the data

1. For housing price data:

Go to Australian Bureau of Statistics (ABS) and download Table 2. Median price and number of transfers (capital city and rest of state). See below screenshot:

Here is the link:

https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/total-value-dwellings/latest-release

1. For interest rate data:

Go to The World Bank website and download Real interest rate (%) Australia (see the EXCEL link on the right-hand side of the page). See below screenshot:

Here is the link:

https://data.worldbank.org/indicator/FR.INR.RINR?locations=AU

1. For employment data

Go to Australian Bureau of Statistics (ABS) and download Table 5. Labour force status by Sex, Victoria - Trend, Seasonally adjusted and Original. See below screenshot:

Here is the link:

https://www.abs.gov.au/statistics/labour/employment-and-unemployment/labour-force-australia/latest-release#data-downloads

Case questions:

1. Plot the Median Price of Established House for Melbourne between March 2002 and September 2022.

2. Looking at the graph in Question 1, can you identify any Time-Series Behaviors? If yes, specify them and briefly explain about each one of them (please refer to the Lecture slides Week 2 for Time-Series Behaviors).

3. Use exponential smoothing to forecast median price of established house in Melbourne for Dec-2022. Find the best value for alpha with two decimal points. The aim is to find the most accurate forecast for this period using MAD and MSE. Explain in detail with all calculations. What does the chosen value for alpha mean? Explain in 2-3 lines.

4. It is argued that interest rate and the employment have causal impact on the housing price in Melbourne. Run the analysis and see whether you can find any such an impact. To answer to this question, you need to calculate the yearly average for house price, interest rate, and employment. For employment use Employed full-time; Persons ;Original (Column M) in the dataset. Which variable (loan rate or employment) does have stronger impact on price?

Please note:

• Please note that your answers to the questions should be based on what have been discussed in this course.

• Use two or three decimal point for all analyses

• Please submit just one file. Your submission must be in Microsoft Word. You can copy and paste screenshots from Excel into the Word document.

• Please ensure of the legibility of the results when you copy and paste from Spreadsheet into Word document.

Marking criteria:

Important information for Assignment 1:

• Please submit just one file. Your submission must be in Microsoft Word. You can copy and paste screenshots from Excel into the Word document.

• Brief explanation is required for all calculations.

• Do not round the results up or down.

Support Resources:

Additional library and learning resources are available to help with the assessment in this course

Link toAssignment Support.

Late work: All assignments will be marked as if submitted on time. Late submissions of assignments without special consideration or extension will be automatically penalised at a rate of 10% of the total marks available per day (or part of a day) late. For example, if an assignment is worth 20 marks and it is submitted 1 day late, a penalty of 10% or 2 marks will apply. This will be deducted from the assessed mark. Assignments will not be accepted if more than five days late, unless special consideration or an extension of time has been approved.

Extensions and Special Consideration

If your assessment preparation has been impeded by unforeseen circumstances (such as illness, injury, unexpected work commitments or carer responsibilities) you may be eligible for an extension.

Requests for extensions must be emailed to the course coordinator at ahmad.abareshi@rmit.edu.au

at least one working day before the assessment deadlineusing the extension request form (available from the RMIT Extensions website see link below).

If you are seeking an extension on or after an assessment due date, or you require an extension of more than 7 days, you must apply forspecial consideration. This is a confidential process.

Please see theRMIT extensions websitefor details regarding grounds for extensions and special consideration and the required supporting documentation.

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