Why Invest in Real Estate in Melbourne
It is anticipated that by 2041, as the second largest city in Australia, Melbourne will have a population of seven (7) million, which will create and underpin ongoing opportunities for investment and development of new projects across a wide range of property markets.
Along with cash, bonds and shares, property is one of the most common types of investment. Here are a few good reasons to consider when investing your money into Victoria’s capital, Melbourne:
1. Meeting the challenge of population growth.
As a city of more than five (5) million people, Melbourne has been given the sprawling geographic footprints, and is facing a challenge. In May 2014, the metropolitan strategic plan – Plan Melbourne was released, which set the vision for how the city will evolve and manage its future growth. it is currently referenced in the State Planning Policy Framework.
It is evident that a need “to increase the supply of well-located affordable housing” to accommodate the population growth is pressing. According to this metropolitan strategic plan, Melbourne will become a more compact city with a need for a substantial amount of new housing in or close to activity centres, infrastructures and public transport.
As such, a demand for rentals across a range of property types will rise and apartment-style living in Melbourne and on the city’s fringe will increase.
2. Affordability and higher returns in the residential real estate market.
Property investment in Melbourne remains favourable, with property prices maintaining a healthy and moderate growth pace. Investing in Melbourne today could mean 100% return on investment 10 years or less from now. As mentioned, property prices are on the move, capital growth is positive.
3. A demand for housing in a context of low urban density.
Melbourne is one of the lowest-density cities in the world, boasting a vast land stretching more than 90km from north to south and 100km from east to west. In terms of the number of dwellings in the active real estate market, it is currently under supply which exceeds 20,000, and it is expected to surpass more than 100,000 in the year 2030. The drastic shortage of accommodation not only means that average property and rental prices are bound to increase; but also reflects the fact that Melbourne will experience a property boom.
4. Liveability as a key strength
Melbourne has been well known as one of the world’s most liveable cities in the last couple of years. It has achieved perfect scores in the areas of education, healthcare, infrastructure and sport. The recognition of being amongst the world’s most liveable cities is also one of the factors undermining Sydney and Melbourne’s exposure to high levels of investment from national and international developers and purchasers into their housing market.
These are just some of the factors that make Melbourne an attractive option when considering property investment. Take advantage of the favourable market now to maximise your capital return in investment.