Australia is a diverse land that is home to a wide range of fascinating natural landmarks and iconic destinations. It is the world’s 12th largest economy, and ranks up there as one of the most well-developed countries in the world.
In the recent Victorian State Election, the Labor government led by Premier Daniel Andrews won a second four-year term, defeating the Liberal opposition by an increased majority of 52 seats. To be sure, Labor has grand plans for Victoria lining up to be executed, but investors will be more concerned about what’s in store for the property market. In their election manifesto, Labor had major plans for housing as well as transport and infrastructure. Let’s take a look.
Housing and Planning
Labor plans to improve the housing market in Victoria generally and to also put it on par with the Victorian Renewable Energy Target (VRET), the party’s primary focus for the environment.These efforts are to advance the quality and sustainability of the residential property in Victoria and forge a better standard of living.
Labor has promised that apartment buildings will be subject to a range of tougher standards such as mandatory green space, installation of sun protection and safe cladding. This is particularly important in consideration of the property boom in Melbourne’s inner city, with its rapid growth of high rise apartments. This suggests that there may be increased costs for future developments, in order to comply with these standards.
There also will be subsidies for rooftop solar panels on 700,000 homes, including a plan to allow the government to share costs with tenants and landlords for solar panel installation on rental properties. This will make buildings more energy efficient.
Transport and Infrastructure
Labor has a solid record for transport and infrastructure projects. Having already more than $60bn of rail and road projects in the pipeline, the party has further pledged to provide “the biggest transformation of public transport in Australian history”, which is to complete a $50bn suburban underground rail loop including 12 new underground stations. This is set to complete in 2050.
Additionally, Labor has fulfilled their previous promise to remove 50 of the most dangerous level crossings over eight years, improving safety and efficiency. The revised promise is for 75 to be gone by 2025, and the good news is that they are ahead of schedule, having already removed a total of 29 this term.
Many of Labor’s big projects are either already underway or have start dates including the $11bn Metro Tunnel project, the North East Link and the West Gate tunnel. Work on the long-awaited rail link to the airport will begin by 2022, and $100m has been allocated for planning towards fast trains to Geelong and Ballarat. Upgrades for the arterial roads and country rail lines are also part of Labor’s manifesto.
What’s in it for Investors?
The re-election of Labor is great news for the property investment in Victoria, especially urban Melbourne. The party’s housing and planning manifesto gives good sustainability that would catalyze the housing market.
The transport and infrastructure manifesto has high potentials to increase job demand. Melbourne has overtaken Sydney as the best place to find a job in Australia according to the Commsec’s quarterly State of the States report, which would only fortify its population growth. Added to this is the increased accessibility for residents living in the suburbs to work in the city, making Melbourne a top choice for anyone looking for a home.
This gives investors promising opportunities with good potential for capital growth and good rental yields, both of which is the highlight of any investment prospect.
Interested in getting in to the Melbourne property market and benefitting from its low vacancy rate and future development plans? Give us a call at (+65) 3163 8343 (Singapore), 03-2162 2260 (Malaysia), or email us at email@example.com!
Once again, Victoria has overtaken New South Wales (NSW) as the state with the strongest overall economic performance rankings in Australia.
Margin lender CommSec’s latest quarterly (Oct 2018) State of the States report has revealed that Victoria has come out top in several key indicators, namely economic growth, employment, construction activity and population growth. This is the first time that Melbourne has beaten Sydney as the best place to find a job in Australia, with trend unemployment rate at its lowest in a decade.
The unemployment rate in Victoria stands at 4.7%, approximately 17.4% lower than the decade average. Victoria’s employment rate, however, is well above (13%) the decade average, making it the best state to secure a job across Australia.
Apart from the employment rate, Victoria was also ranked first in construction activity. This is the second time that Melbourne has beaten Sydney to the top spot in this sector.
Victoria retained top spot with construction work done almost 39% above its decade average.
NSW construction was next strongest at 31.4% followed by South Australia, up 25.3%. Construction work done in these states were at record highs in the June quarter.
Victoria also topped the ranking for the second consecutive time as the state with the highest economic growth. Last quarter, it knocked NSW off its perch for the first time in a decade.
Economic activity in Victoria in the June quarter was 26.7% above the decade average level, ahead of NSW at 25.7%.
When looking across growth rates for the states and territories, it is clear that Victoria had exceeded the national average in all of the eight indicators measured, albeit by a narrow margin.
Last quarter, Victoria remained just ahead of NSW with strong economic strength, population growth, construction and investment activity.
The strong quarterly performance augurs well for Victoria.
Investors can look forward to leveraging upon these promising aspects of Melbourne, using it as a guide to future investments that could result in good rental yield and capital appreciation.
Perth is set to be the next Melbourne, a new report from Infrastructure Australia indicates. After a stagnant 2017, Corelogic predicts that house prices in the inner city will rise by 3.3% this year and 4.1% in 2019. With prices at an affordable rate, property situated in choice locations are ripe for the picking and investors stand a chance to reap returns from the growth of the property market in the future.
Currently Perth is Australia’s fourth largest city by population. By 2046 it is forecast to leapfrog Brisbane into third place, with 4.3 million people — the current population of Melbourne. And if the Government’s recent proposal to restrict immigration to Sydney and Melbourne goes through, the city’s eventual population may exceed even that figure.
Australians traditionally are resistant to the idea of living in apartments, and this is more so for those living in Perth. Just 6.6% of the city’s residents live in apartments, half the national average of 13.1%. This will change as numbers increase — as a large-scale city grows, it expands not just outwards but upwards as well.
The Perth suburban sprawl stretches along the Western coastline for about 150km, making it almost nine times as large as Singapore, but with just over a third of its population. As the population grows to a similar scale as Melbourne, apartment living will become more widespread.
The 2016 Australian Census showed that there is one occupied apartment for every five (1:5) occupied separate houses in Australia; compared with one to every seven (1:7) 25 years ago. Apartments are also getting taller. Twenty years ago, about 20% of apartments were in blocks at least four storeys high, with the proportion now closer to 40%.
Over the past decade, the number of apartments in the Perth council area alone has increased by about 150%. Perth has seen changes in planning that recognises this, and state and local governments are encouraging strategic placing of mixed-developments where they benefit the most, close to existing good transport, infrastructure and in high-amenity locations.
One example of these developments is NV, a new off-plan apartment within Perth’s central business district (CBD), benefitting from the completion of the Perth City Link.
Perth City Link is a major urban renewal and redevelopment project to the tune of over A$5 billion, playing a central role in regenerating Perth’s entertainment, cultural, shopping and infrastructure links. Rail and bus links have been completed, connecting the city centre with the Northbridge entertainment precinct. Currently, further development is ongoing on a mix of retail, tourist, office and residential accommodation.
Corelogic looked at changes in the property market across Australia over the last 25 years, and found that prices in Perth grew at an annual 6.7% for houses and 6% for apartment units since 1993 — making it the third best property market after Sydney and Melbourne.
Following the nation’s property downturn, prices have slipped by more than 10% across the city since mid-2014, although some areas have managed to be relatively unscathed. The outlook for the next two years is that improvement in the economy and population growth will stabilise the Perth real estate market. After a stagnant 2017, Corelogic predicts that house prices in the inner city will rise by 3.3% this year and 4.1% in 2019.
RED ALERT: Perth will be imposing additional stamp duty for foreign investors in January, which is an extra 7% on the property price. Investors looking to buy property can avoid the hike by signing contracts before Jan 1st, 2019.
Interested in to get into the Perth property market before the 7% tax kicks in? One of the latest developments in the city’s prime CBD, NV Apartments, has a superb location with a whole host of luxurious amenities, from just A$313,000. Act quickly and give us a call at (+65) 3163 8343 (Singapore), 03-2162 2260 (Malaysia), or email us at firstname.lastname@example.org.
Compared to developing nations with far stronger population growth rates, Australia is expanding pretty quickly for a developed country.
Last month, Australia’s population officially ticked past the 25 million mark, according to the latest data by the Australian Bureau of Statistics (ABS) – 33 years earlier than projected!
Over the last three years, the nation’s population grew by around 400,000 people per year. If this trend continues, the number might reach 26 million in the next two to four years. This is no mean feat considering that the population Down Under was only at the 10 million mark back in 1960.
Nett migration has continued to outpace births, with the highest migrant numbers coming from China and India.
Newly elected Minister for Cities, Urban Infrastructure and Population, Alan Tudge, in outlining plans for the country’s immigration policy, is not in favour of reducing skilled migrant numbers.
“My view has always been that Australia can be a bigger country. But, ideally, you have a broader distribution rather than very rapid growth in some areas,”he said.
Melbourne and Sydney are expected to grow to the size of New York city by 2050 as migration numbers continue to grow.
To date, Melbourne has the fastest-growing population rate in the country. Naturally, this has something to do with Melbourne’s ranking as the World’s Most Liveable City for seven consecutive years, receiving a perfect score from The Economist for healthcare, education and infrastructure.
“There’s a buzz about the city that keeps bringing the world’s best to enjoy Melbourne,” said the Australian government in a statement.
Victoria has an estimated population of 5.71 million, ranking second in the country with a population density of 25 people per sq km. The state accounts for 25% of the entire Australian population.
And, for the first time ever, Victoria finally overtook New South Wales as Australia’s strongest economy in CommSec’s latest State of the States report.
Victoria’s high population growth has also supported house prices and rental values in Australia, and is a reason why the Melbourne market has remained strong.
In quarterly data by JLL Australia, apartment price growth for Greater Melbourne (for both new and existing stock) increased 6.6% y-o-y to 1Q2018, which is above the five-year annual average rate of 4.5%. Rental vacancy remains tight in the city.
The recent 2018 Global Real Estate Transparency Index by JLL ranks Australia’s property market as the most transparent in the Asia-Pacific region. This, and the all the things that make Australia such an attraction — good governance, strong healthcare and education systems, etc — are a great draw for property investors and millionaires.
What do you think of Australia’s population growth for the Australian economy and property market as a whole? Leave your comments in the box below! For more details on investing in Australian property, call us at 65-3163 8343 (Singapore), 03-2162 2260 (Malaysia), or email us at email@example.com!
By Noorasikin Ali
Additions & Edits by Vivienne Pal