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Australian Real Estate Surges as Investors Begin to Look Internationally

Real estate in Australia surges, causing investors to look towards that country for success. Prices and demand coninue to go up creating a high demand and high chance for success in Australia's big cities such as Melbourne and Syney

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Australian Real Estate Surges as Investors Begin to Look Internationally

  1. 1. Australian Real Estate Surges as Investors Begin to Look Internationally by Marco Kozlowski Accordingto real estate investmentguru,MarcoKozlowski,SydneyandMelbourne continue to be the strongestreal estate marketsinAustralia. Despite the strongfocusonthese twocities, Australia’smarketscontinuetodowell overall. Despite quicklyrisingprices,Sydneycontinuestodowell due toitsstrong economy,growing population,andlimitedsupply. Sydneyhasmostlyunobstructedborderswithroomtogrow,buteven so,supplycannotkeepupwithdemand. The populationof Sydneyisexpected toreach6.1 millionby 2031 requiringover50,000 newresidenciestobe builteachyear. However,onlyaround45,000 homes are expectedtobe builteachyear. The lack of obstructionstogrowthmeansthat Sydneyhasroomto grow,preventingabubble situation,butwithnew constructionunable tokeepupwithdemand,the value forSydneyreal estate shouldcontinue togrow. AnalystLouisChristopherof SQMResearchstatesthatthe real estate marketinSydneyis experiencinganunmatchedboom. Original forecastsof marketgrowthpredictedanincrease of 8 to 12 percent. Withfurthercalculations,SQMincreasedtheirforecastto12 to 15 percentprice increases,but are nowevenconsideringthattobe toolow. Theirmost recentpredictionsforecastprice gainsto increase past20 percent. Sydneysuburbswiththe highestlevelof investments. Parramattawasthe numberone suburbforinvesting. The othertopten suburbson the list, inorderof rankingsecondto tenth,were PointCook,Carlton,Blacktown,Glen Waverley,Penrith,Frankston,Auburn,Brunswick,andLiverpool. WestSydneyisgarneringa large amountof interestdue tothe New SouthWalesgovernment financingthe area. There isalsomajor residential growth,aswell asanalluringfocusonarts and culture. A secondSydneyairportisplannedforthe westernareaof Sydneywhichwill furtherincrease accessibilitytothe areaand promote the successof the economyinthe region. Additionallyanewrail station,the NorthWestRail Link,and WestConnex will furtherpromote traffictothe region. As Parramatta isone of the mostsuccessful suburbsinthe westernSydneyarea,itshouldcontinue tobe an attractive area forreal estate investments. While SydneyandMelbourne continue tobe the mostattractive real estate markets,new areas aroundAustraliaare beginningtorise aspotential hotspots. Investorslookingtocash inon the thriving Australianmarketwithout wantingtopayfor the increasingSydneyandMelbournepricesare now expandingtheiroutlooktoinclude regional markets. Areasthathavinggrowingpopulations,awide range of industries,andbetteraccessibilityare the bestbetsforinvestorslooking atregional markets. Miningtownsare nolongerattractive investmentmarketsdue toadecline inironandcoal prices. Larger citiesare saferinvestmentoptions,while smallerormore rural locationstendtostill be a greater investmentrisk. A study bym3propertyrankedNewcastle,Barwon,Geelong,andBallaratasthe most active regional marketsinAustralia.
  2. 2. Brisbane andsurroundingareasof SydneyandMelbourne are alsoseeingnew interestas investorsattempttocashin on the successof SydneyandMelbourne withoutpayingthe increasing initial costs. Additionallythe Australiangovernmentininterestedinpromotinginvestorsbranchingout to otherparts of the countryand are more lenienttoinvestorswhogoforreal estate outside Sydney and Melbourne. Theywanttopromote the kindof cash in-flow thatSydneyandMelbourne are seeing to as much of the country as possible.