All signs point to Melbourne for Property Investors

All signs point to Melbourne for Property Investors

As predicted by Property Update, Melbourne is hot right now. If like many Investors you listen to a litany of property Podcasts then you will have heard it time & again, CBD’s have been unloved for the past 2 years but that is all about to change.

A study by NAB has singled out where it might be better to buy than to rent, and suggested that the inner Melbourne suburbs of Carlton, Docklands and the CBD could be among the best places to buy property in Australia, both for owner-occupiers and investors.

 It has narrowly outstripped Singapore and Sydney as the best prospect in Asia pacific region for both investment and development, according to new data.

 A real estate forecast jointly published by the Urban Land Institute (ULI) and PwC — called The Emerging Trends in Real Estate Asia Pacific 2019 — showed one of the reasons for Melbourne’s ascent in the rankings was because its office supply pipeline is more constrained than in Sydney.

Looking back the Melbourne property market has been one of the strongest and most consistent performers over the last four decades. The median Melbourne house has increased by 7.9% per annum, and the median Melbourne unit/apartment price has increased by 7.73%per annum. Obviously, this wasn’t the same each and every year, as the Melbourne property market worked its way through the typical property cycles.

Melbourne competition for the asset has helped in sustaining pricing with low vacancies and growing demands for space suggest rent will continue to increase.

Melbourne has an emerging trend report, which is being released at a series of events across Asia over several weeks, provides an outlook on Asia pacific real estate finances and capital markets, and trends by property sectors and metropolitan areas.

The survey result for this year’s emerging trends in real estate Asia pacific reports shows that many investors in the region are looking to Australia’s largest cities for investment opportunities.

Data indicates that both Melbourne and Sydney are the core markets to invest in for capital growth by seeing numbers of the investable asset significantly lower than in japan and so there is a strong competition to place capital, especially with so many international players looking to buy.

Furthermore, the report also found investors today are likely to become more specific in their selections, working from the ground up rather than top down.

Among the trends in the Asia Pacific region that the report cites are:

● Logistics facilities continue to be a go-to investment: The only sector where investor opinions were uniformly bullish, investment allocations to the sector have risen significantly since 2018.

● Co-living as a template for future housing: As cities are becoming denser and housing costs rise, more developers are looking to co-living as a way to pack more people into smaller areas.

● Capital flows remain strong: The ongoing build-up of liquidity across the Asia Pacific region continues to see huge amounts of money being sent cross-border to be invested in foreign real estate assets. Strong outflows in the region seem certain to continue, especially with continued new reserves of capital from Japan likely to enter the mix.

While Melbourne’s housing values have not grown as strongly as other capitals, the pent-up demand at a time of increasing consumer confidence, an improving economy, and abundant job creation augurs well for continued strong Melbourne house price growth in 2022.

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