Australian Real Estate Surges as Investors Begin to Look
Internationally by Marco Kozlowski
According
to real estate investment guru, Marco Kozlowski, Sydney and Melbourne continue
to be the strongest real estate markets in Australia. Despite the strong focus on these two cities,
Australia’s markets continue to do well overall.
Despite
quickly rising prices, Sydney continues to do well due to its strong economy,
growing population, and limited supply.
Sydney has mostly unobstructed borders with room to grow, but even so,
supply cannot keep up with demand. The
population of Sydney is expected to reach 6.1 million by 2031 requiring over
50,000 new residencies to be built each year.
However, only around 45,000 homes are expected to be built each
year. The lack of obstructions to growth
means that Sydney has room to grow, preventing a bubble situation, but with new
construction unable to keep up with demand, the value for Sydney real estate
should continue to grow.
Analyst
Louis Christopher of SQM Research states that the real estate market in Sydney
is experiencing an unmatched boom.
Original forecasts of market growth predicted an increase of 8 to 12
percent. With further calculations, SQM
increased their forecast to 12 to 15 percent price increases, but are now even
considering that to be too low. Their
most recent predictions forecast price gains to increase past 20 percent.
Realestate.com.au
Investor Hotspot released a report detailing the Sydney suburbs with the
highest level of investments. Parramatta
was the number one suburb for investing.
The other top ten suburbs on the list, in order of ranking second to
tenth, were Point Cook, Carlton, Blacktown, Glen Waverley, Penrith, Frankston,
Auburn, Brunswick, and Liverpool.
West
Sydney is garnering a large amount of interest due to the New South Wales
government financing the area
. There is also major residential growth, as
well as an alluring focus on arts and culture.
A second Sydney airport is planned for the western area of Sydney which
will further increase accessibility to the area and promote the success of the
economy in the region. Additionally a
new rail station, the North West Rail Link, and WestConnex will further promote
traffic to the region. As Parramatta is
one of the most successful suburbs in the western Sydney area, it should
continue to be an attractive area for real estate investments.
While
Sydney and Melbourne continue to be the most attractive real estate markets,
new areas around Australia are beginning to rise as potential hotspots. Investors looking to cash in on the thriving
Australian market without wanting to pay for the increasing Sydney and
Melbourne prices are now expanding their outlook to include regional
markets. Areas that having growing
populations, a wide range of industries, and better accessibility are the best
bets for investors looking at regional markets.
Mining towns are no longer attractive investment markets due to a
decline in iron and coal prices. Larger
cities are safer investment options, while smaller or more rural locations tend
to still be a greater investment risk. A
study by m3property ranked Newcastle, Barwon, Geelong, and Ballarat as the most
active regional markets in Australia.
Brisbane
and surrounding areas of Sydney and Melbourne are also seeing new interest as
investors attempt to cash in on the success of Sydney and Melbourne without
paying the increasing initial costs.
Additionally the Australian government in interested in promoting
investors branching out to other parts of the country and are more lenient to
investors who go for real estate outside Sydney and Melbourne. They want to promote the kind of cash in-flow
that Sydney and Melbourne are seeing to as much of the country as possible.