Where there are markets there are opportunities: Michael Davoren
Staff reporterDecember 7, 2020
EXPERT OBSERVATION
Housing is Australia’s single largest asset class, worth more than four times the value of Australian-listed stocks.
In New Zealand, investment in houses represented around one third of all investor activity in a 12-month period.
Today’s choices in investment opportunity have reduced as investors are faced with low interest rates, inflation rates, taxes and a stock market that is out of an individual’s control.
Real estate is more than an asset class; it is a long-term asset wealth growth vehicle too. Real estate protects investment against inflation through the economic cycles and offers growth in response to increasing demand for property.
Investment concentrations tend to be highest within the capital cities, and we are all very aware of Sydney, Melbourne and Auckland and the machinations in those markets.
Take Sydney, Melbourne and Auckland out of the picture and look at investment potential in other major cities, mining regions, coastal markets and other markets associated with tourism and lifestyle factors.
Queensland’s improving economy, housing affordability, a rise in interstate migration and increased optimism in the market are all driving the value of the state’s residential real estate sector, for example.
Coastal and inland regions of all Australian states have the potential for rental return and capital gain. Cairns, Townsville, Mackay, Gladstone, Wagga Wagga, Dandenong and Mount Gambier are fair examples here.
In New Zealand, the average national property price climbed 65 to 70 per cent over a decade, putting in a better performance than the share market.
Almost half the value of New Zealand homes is inside Auckland city but as that market takes a breather, look to the opportunities to in regional New Zealand: in Wellington, Christchurch, Tauranga, Invercargill and others.
A massive opportunity to buy may exist in every Australian state and New Zealand region so don’t allow two or three markets to taint the scene.
Even within a single city, there’ll be better investment opportunities than others.
Look at the $5 million-plus market, which appears very strong in Sydney, a good example of a truly international city with a limit to its land availability.
Every area that booms has to have a breather, and there will be opportunities to get back into that market.
MICHAEL DAVOREN is the Managing Director of RE/MAX Australia & New Zealand