Is Australia the 21st century super-prime real estate story?

February 12, 2018

Australian Major City Population Forecasts

Top 10 Reasons to Invest in Australian Super-Prime Real Estate

Timing and location are everything when it comes to purchasing Real Estate. With Super-Prime, perhaps even more so. That said however, the 21st Century is certain to see massive change, growth and opportunity all across Australia, particularly the Super-Prime residential neighbourhoods of Melbourne and Sydney.

  1. Australia in the 21st century is benefitting from the perfect confluence of geography, demographic shifts, urbanization and immigration, including:
    • a. Highly Desirable Location – Australian cities are regularly voted among the best cities in the world to live in.
    • b. Educated Population – A highly skilled workforce is a primary focus of Australian immigration policies
    • c. Favourable Migration Policies – Australia has adopted a Big Australia immigration policy and has one of the highest net immigration rates in the developed world.
      • i. The preliminary estimated resident population of Australia grew from 24,210,800 at June 30th, 2016 to 24,598,900 at June 30th, 2017. An increase of 388,100 residents in 12 months.
      • ii. Between 2018 and 2050, Australia’s population is forecast to grow from approximately 24 million to approximately 38 million. That is an addition of 14 million people in 32 years. Melbourne and Sydney each anticipate adding over 3,000,000 new residents between now and 2050 growing to approximately 8,000,000 residents per city. Perth, Brisbane, Adelaide and the Gold Coast anticipate population growth of over 5,500,000 by 2050. Taking the existing population from 6.5 million to over 12 million. These six cities combined will need to provide housing for close to 12 million new residents in 32 years, equating to a need for 175,000 – 200,000 new homes per annum.
  2. Real estate investing has created more wealth than any other asset category. Opportunistic and thoughtful real estate investing is a much more precise wealth creation strategy than simply buying in hopes of seeing value increase.
  3. Adding value to opportunistic real estate investments, in rapidly growing cities is the best way to increase long term returns and provide a buffer in cyclical downturns.
  4. Residential investment as an asset class is an incredible opportunity to create significant, sustainable wealth over a lengthy time frame.
  5. Australia has many highly desirable neighbourhoods, communities and cities.
  6. All Australian super-prime urban centres are facing long-term housing inventory shortages, particularly the high demand niche infill markets. Great locations like these provide the most stability and liquidity in all markets.
  7. Urban migration is driving demand for new homes and the existing stock in many cases, needs to be rebuilt or replaced.
  8. Although like all large cities, a modicum of NIMBYism exists, Australia’s “Big Australia” Immigration policies have contributed to a very pro-growth approach towards development.
  9. In many cases the populace of Australia’s cities has taken on a “bigger, better, faster” competitive approach, pushing to outdo each other in both population growth and the maintenance of highly liveable communities.
  10. Inevitably, rapid growth brings with it, growing building constraints such as height and density restrictions, geography, pace of infrastructure expansion, etc. These constraints will continue to bottleneck supply for the foreseeable future in super-prime Australian neighbourhoods. Increasing the value of the underlying land, as demand continues to escalate and the most desirable neighbourhoods become ever more desirable.
/ CATEGORIES: Robert Quigg’s Blog