A new report projects what major shifts in the economy need to take place to ensure growth, and the make-up of the property market factors significantly in these changes.
The Australian National Outlook 2019 report, from a collaboration between the CSIRO and NAB, has identified that Australia’s economy is set towards a “slow decline” by 2060 if no action is taken.
In the event of no action, GDP growth is predicted at 2.1 per cent annually, with no real change to the property types seen in capital cities.
However, the report projects that by addressing some economic fundamentals, GDP growth could be upwards of 2.75 per cent, and average density of major cities could increase by 60 to 88 per cent.
In order to do so, five key shifts are required, which according to the report are:
To succeed in enhancing Australia’s economy, the report specified that there would need to be an increased density in Australian cities, with a greater mix of housing types.
This would see a shift away from the property market being dominated by separated dwellings and instead seeing medium- to high-density dwellings making up just over 50 per cent of housing stock.
“First, [this] allows more people to live closer to a richer set of urban jobs and amenities. Although this may not impress those who are increasingly sharing their space, for these people the benefit is the opportunity to stay within their community throughout their life stages,” the report stated.
“In addition, the increased mix of housing offers reasonable accommodation to the people on whom these communities rely, namely those working in essential services, education, health and personal services in particular.”
The report noted that overseas models should be adapted to ensure that funds are processed to amenities in Canada’s Vancouver and its density bonus zoning scheme.
“This scheme allows developers more floor space than may otherwise be permitted in a zone in exchange for amenities needed by the community,” the report stated.
“Those amenities may include parks, childcare centres, affordable housing, community centres or libraries – any public asset that the local community approves.”
Peter Koulizos, chairman of the Property Investment Professionals of Australia, also saw the potential for more medium- to high-density properties.
To get to that point though, he predicted there would need to be more infill developments in existing suburbs.
In order to make way for higher density developments, investors with separated dwellings on large blocks of land may find themselves in favourable locations, he said, either through the construction of a development themselves, or by selling off the land to developers.