A high-level view of real estate in Australia
Welcome to this episode of Eddie Senatore Talking Business, based on our monthly two-page newsletter. In this episode, we take a look at the current state and near future of the Australian real estate market, with special guest Harley Dale from the Housing Institute of Australia.
With the real estate market in maturity, you may be wondering whether or not real estate is a worthwhile investment for you. If you have some questions, Harley has some great insights on what the market’s like that you need to listen to right now.
Here are three big takeaways we have:
Multi-family housing is a strong growth sector
Australia had a record building boom a few years ago. That was largely in the supply of detached and semi-detached housing. These days, demand for housing has shifted to medium-rise and high-rise multi-family housing, which represent the bulk of the the new stock on the market.
Growth in this space has largely been on the eastern seaboard of Australia. Other parts of the country have not seen growth to the scale that has occurred there.
Demand in housing remains really strong
One only needs to look at how the market is reacting to current housing projects in development to see how strong demand is. For instance, there’s a large multi-family housing project in construction right now in Canberra. It won’t be completed for at least another 6 months. Despite the wait before the first tenants can get their keys, 95% of the occupancy in the building is already accounted for.
Demand like this helps explain why real estate experts continue to see strong gains in the asset value of real estates across much of the country (outside Sydney).
Political uncertainty is making the future cloudy
Harley would love to give us strong, detailed predictions about what the real estate market will be like in the next few years. Unfortunately, the federal election looming on the horizon is making it difficult. WIth a regime to be decided on by voters next year, policies could be very different or very similar to those seen today.
An opposition party has already demonstrated interest in real estate policies quite different from those supported by the current government. As we follow the polls and see where the candidates really stand as the country goes to vote, we’ll be able to have greater certainty as to what investors can expect.