Aerial view of Sydney, Australia.
Such is the significance of Sydney that its cityscape has become representative of Australia. Any mention of the country inevitably conjures up images of the Sydney Opera House and Sydney Harbour Bridge. We take a look at five reasons why the poster city of Australia deserves the same recognition from property investors.
1) It’s where the action is
Canberra may be Australia’s capital, but there’s no doubt that Sydney is the city that leads, at least in all the aspects that matter to the common man. The vibrant city is the hotspot for culture and entertainment in Australia, an undisputed opinion shared by visitors, if tourist numbers are anything to go by. In the year between October 2015 and September 2016, 3.5 million travellers made their way to Sydney, compared to the 2.5 million who visited Melbourne, Sydney’s closest competitor in tourism. Chinese arrivals saw a 20 percent increase last year, and is expected to continue climbing. Cosmopolitan, safe and welcoming, Sydney’s appeal is apparent to visitors, and appreciated by those who call it home. No wonder it was named the world’s most liveable city by Price Waterhouse Coopers in 2014.
2) It’s where the growth is
New South Wales is the main engine behind Australia’s economic growth, and Sydney, being the state capital of the region, is the leader. It’s a favourite location for many international companies looking to set up branches in Australia. With the growth of these companies comes the growth of Sydney’s expat demographic, contributing to the city’s burgeoning population, which is expected to hit five million in the near future. This big number simply means one thing for the property market: the promise of a healthy demand. In Knight Frank’s Prime Cities Forecast Report 2016, Sydney beat nine other cities, including New York, Shanghai and Monaco, to be named the city expected to see the strongest prime residential growth for the year. This prediction was based on Sydney’s stellar performance in the preceding years, including 15 percent real estate value growth witnessed in 2015. The city is showing no signs of slowing down; insiders are giving forecasts of property price gains between four and nine percent this year.
3) Its suburbs can hold their own
Sydney’s suburbs are transforming into viable residential areas, with amenities and living spaces to rival the city centre. Parramatta in the west, for example, has attracted several multinational companies in recent years, and seen a jump in executive-level jobs more commonly associated with inner city areas. Its population is expected to grow 24 percent from the current 190,495 to 236,864 by 2036. Waterloo, located south of the CBD, is the site of a new metro train station, slated to begin construction in 2018. Planned along with it is an ambitious redevelopment proposal for Waterloo. Around 40ha of the suburb will be transformed into a mixed-housing precinct, with about two thirds of the land reserved for private developments. With urban renewal schemes like these, the demand for high quality apartments in Sydney’s suburbs is definitely expected to grow.
University of Sydney.
4) A preferred city for foreigners looking to take root in Australia
There are currently 500,000 international students in Australia, and the number is set to grow 30 percent by 2020. Sydney, being home to a high concentration of reputable universities, such as the University of Sydney, University of Technology Sydney and University of New South Wales, attracts more than a third of Asian students seeking overseas tertiary education. In addition to the universities, a simplified visa programme was also introduced in July last year that would facilitate the arrival of students interested in studying at a primary level in Australia. Education is a big part of the Australian economy, and is expected to contribute AU$19 billion by 2020. With the growth of the education industry comes the increasing demand for housing in the regions surrounding the universities. Property investors looking to target this segment of the market can always expect a healthy demand. Likewise, those looking to take advantage of their child’s educational stint in Australia and buy a property that serves as housing now and investment later, can expect a good selection.
5) It has a good investment environment
It’s not hard to see why Sydney was named one of the top 10 markets to watch by Knight Frank in 2015. Its political stability, high employment rates, strong infrastructure and good residential property price growth, all make it an appealing option for investors. In addition, Australia benefits from proximity to the rest of Asia and Sydney, in particular, is a gateway city enjoying good flight connections to places like Singapore, China and Hong Kong. According to property consultancy Colliers International, gateway cities remain popular with cross-border investors looking to diversify their portfolio.
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