Melbourne has topped the list for investment and development in property, just ahead of Singapore with Sydney third.
Australia’s strong underlying economic growth, high yields relative to other Asia-Pacific markets, good prospects for rental growth and market transparency are some of the key drivers for continued domestic and global investor interest in the Melbourne and Sydney investment and development property markets, according to the latest results from The Emerging Trends in Real Estate Asia Pacific 2019 survey.
The survey is based on the opinions of 350 real estate professionals and was jointly published by the Urban Land Institute (ULI) and PwC and highlights that Melbourne’s ascent in the rankings to first in investment and development is because of its office supply pipeline is more constrained than Sydney, has a good yield spread over the cost of debt and sovereign bonds, a deep core market and good prospects for rental growth.
Singapore’s city office market improvement has seen the city come in second overall (second in investment, eighth in development).
Sydney’s third place in investment and development and overall is due to the same reasons as Melbourne.
Tokyo came in fourth in investment and development and has made a comeback this year thanks in part to cheap finance, attractive leverage, a good spread over other interest rates and a large stock of investment-grade assets.
Another interesting trend in the Asia Pacific region that the experts are reporting is around co-living as a template for future housing. As cities grow denser and housing costs rise, more developers are looking into co-living and medium density developments to serve more people into smaller areas.