Victoria’s capital city has been named the best city in which to invest across the whole Asia-Pacific region. But what makes it a great investment destination?
The Emerging Trends in Real Estate Asia Pacific ® 2019 report, compiled by the Urban Land Institute and accounting firm PwC, ranked Melbourne as the top city in all of APAC in which to invest, beating out Singapore and Sydney in second and third places respectively.
According to the report, office investment was the top asset class that contributed to Melbourne’s investment desirability. Yet while commenting on the result, Mark Dawson, director of Urbis, suggested the city’s office investment drivers are also elevating the status of residential investment.
He said both the residential market and the office market were experiencing comparable growth drivers.
“There's a number of things that have been driving the office market that interrelate with the prospects of the wider market, and to a degree, yes, those employment prospects will drive the residential market in a similar fashion,” Mr Dawson told Smart Property Investment.
Mr Dawson said much of the employment growth happening in Melbourne is office-based, making daily commutes to work an attractive proposition with flow-on effects for residential property.
“So that diversity of employment, the solid prospects of employment growth on one hand is driving demand for employment floorspace, but then on the other hand, the Melbourne CBD and Docklands in particular have been able to produce high quality office space at a lower rent for corporate occupiers, which has drawn a good business base to Melbourne in recent years.”
In addition, the city is experiencing constraints on supply, he said, which is further driving financial returns .
Mr Dawson said it was no surprise that “there’s a level of attractiveness around Melbourne”.
“Its brand globally has increased and raised profile in recent years … topping the rankings for a long time [as] the most liveable city as well as growing quite strongly in population terms,” he said.
This has occurred even despite the credit tightening and fallout from the banking royal commission, which Mr Dawson said means that when compared with the global economy, has earned Melbourne a reputation for being “strong, stable and steady”.
“It's a stability and growth story that people have been drawn to in Melbourne: a safe haven,” he said.