According to the Australian Bureau of Statistics (ABS), our capital cities are filling up fast. In real estate terms, that means that demand for property – both to buy and to rent – is increasing in Sydney, Melbourne, Brisbane, Adelaide, Perth, Hobart, Canberra and Darwin. Last year, Perth, Darwin, Melbourne and Brisbane were the biggest movers. Sydney, as usual, was a powerhouse. However if current trends continue, Melbourne is set to overtake the Emerald city to be Australia’s biggest city by 2053.
The Asian market in particular has their eyes firmly set on real estate in capital cities. According to Credit Suisse, their appetite for capital city real estate is expected to hit $44 billion in the years ahead. (For more information, read the article in this newsletter, ‘The Rise and Rise of the Foreign Investor’).
Rise in dwelling approvals
These new residents need a place to live – and so, more property needs to be developed. Fortunately, dwelling approvals have risen in all capital cities – figures show a nationwide surge in dwelling approvals across most states, up 20 per cent on the same time last year. But, demand is still exceeding supply.
What does this mean for you?
If you’re looking to invest in real estate, there’s never been a better time. Interest rates are at an all-time low, prices stabilise over the winter months and demand for property in capital cities will continue to grow.
It is estimated that 73 % of Australians will live in capital cities by 2053 and, in simple supply and demand terms, this means the housing market in capital cities will continue to boom. And so, investing in a capital city property – even if it’s not your own city – should be considered as a long-term investment strategy.
Which city to invest in property?
There’s a lot to consider – the average house prices, population growth and economic status of each of the capital cities need to be taken into consideration.
Sydney is still the most expensive city to purchase in, where median house prices are $793,000. Hobart is the most affordable, with a median house value of $139,053. However, vacancy rates in Sydney are extremely low, meaning that an investment property – particularly in a popular area – will always be in demand.
The bottom line – get professional advice
With markets changing on a daily basis, the best strategy would be to seek professional advice when you’re ready to invest. Based on the amount you have to invest and your goals, they will outline the choices and help you decide which one is right for you.
Investing in property is an important step. So if you don’t know the market, turn to someone trustworthy who does.