Australia ranked third most transparent real estate investment market but loses top ranking to US: Jones Lang LaSalle
Australia remains a highly transparent real estate market and thus appealing to offshore investors, but has fallen two spots in Jones Lang LaSalle's biennial 2012 Global Real Estate Transparency Index, with the US and UK ranking higher.
Australia ranked third out of 97 countries and is the top Asia-Pacific country, ahead of New Zealand (fifth) and Hong Kong (11th).
Australia has a 2012 transparency ranking of 1.36, with a perfect score being 1 and 5 indicating “total real estate opacity”
Other countries to rank in the “highly transparent” category in 2012 are Netherlands, New Zealand, Canada, France, Finland, Sweden and Switzerland.
In the 2010 survey Australia ranked number one (1.22) followed by Canada, the UK and New Zealand (tied with Sweden) with the US ranking sixth.
The World’s Most Transparent Countries, 2012
According to Jones Lang LaSalle, rising levels of transparency are associated with an increase in foreign direct investment, with the index used by investors as a risk management tool "offering comparative information across multiple geographies".
The 2012 survey ranks countries on 83 different factors.
“The results show no deterioration in Australia’s transparency performance since the survey was last conducted two years ago. Our market is highly transparent and stable,” says Australasian head of research at Jones Lang LaSalle David Rees.
“Changes to the methodology in the questionnaire this year has resulted in a shuffling of the ranking for the top three countries, but the gap in the scores amongst the top three remains paper thin.
“The survey has been extended and refined this year by adding in further questions. It is worth noting that the Australian score actually remained unchanged between 2010 and 2012 based on a direct comparison between the questions asked in 2010 compared to 2012,” Rees says.
In 2012 environmental sustainability emerged as an important transparency factor, with Australia ranking second behind the UK on this measure. The UK implemented the world’s first green building rating system.
The report notes that Australia “has been the test bed for new environmental laws, regulations and incentives”.
The World’s Most Transparent Countries, 2010
2010 | Market | 2010 |
1 | Australia | 1.22 |
2 | Canada | 1.23 |
3 | United Kingdom | 1.24 |
4 | New Zealand | 1.25 |
4 | Sweden | 1.25 |
6 | United States | 1.25 |
7 | Ireland | 1.27 |
8 | France | 1.28 |
9 | Netherlands | 1.38 |
10 | Germany | 1.38 |
11 | Belgium | 1.46 |
12 | Denmark | 1.50 |
The latest survey finds that as real estate markets recover there has been a renewed impetus to being more transparent, with nearly 90% of markets having registered advances in real estate transparency during the past two years.
Transparency advances have been driven by improving quality of data on market fundamentals and performance measurement, combined with better governance of listed property vehicles.
Notably, the 2012 index highlights continued transparency deficiencies in many African, Middle Eastern and Latin American markets.
Nations scoring the lowest on transparency, the so-called opaque markets, include Venezuela, Mongolia, Tunisia, Ghana, Iraq, Pakistan, Algeria, Belarus, Angola, Nigeria and Sudan. Many of these countries were assessed for the first time in this update of the index.
The full list of 2012 rankings can be found here.