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Inner-city apartment investors to reap big rewards

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Australia’s growing population and increased interest from offshore investors will ensure inner-city apartments deliver solid returns to investors over the next 50 years, according to a new research paper.

A new white paper by real estate group LJ Hooker, The apartment re-evolution, says investors are well placed to capitalise on Australia’s changing demographics and property preferences.

“The demand and popularity of apartments is set to continue thanks to population growth, ongoing dwelling supply issues, affordability and lifestyle choices which see people prefer inner-city localities close to amenities, entertainment and services,” the report says.

“According to the ABS, Australia’s population is projected to double to 46 million people over the next 50 years. This sustained growth, combined with ongoing supply issues, is expected to see higher density zoning introduced across the majority of metropolitan areas.

“The cost of providing and running infrastructure such as public transport, roads, medical and education services will see state governments prefer to increase density and infill development in order to maximise the efficiency and usage of existing infrastructure.”

The report also highlights the push and pull factors which have led to Australia becoming a popular international investment location. In addition to government stability, legal transparency and educational opportunities, the paper says price is a major driver for international investors.

“Affordability has been a major talking point across the Australian housing market for some time. However apartment prices in our capital cities are cheaper when compared with other global gateway cities. This is especially true for buyers from major Asian cities, such as Hong Kong and Singapore, where prices average around US$20,000 per square metre. This is also an attraction for investors from the US, UK and Europe looking for a change of lifestyle or holiday home, in a warmer environment.”

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