The Australian economy is transitioning from recovery to expansion phase earlier and with more momentum than anticipated. The unique features of the pandemic and policy response have seen the economy rebound much faster than in previous downturns. Along with favourable health outcomes and the removal of restrictions on activity, the “V” shaped economic rebound has been supported by extraordinary fiscal, monetary support as well as record-low interest rates at least until 2024. Australia continues to be a highly attractive destination for foreign direct investments (FDI) with an 8% average annual growth since 2000 and has surpassed $1 trillion in 2020.
Stable Politics & Economy
Australia’s stable political environment supports transparent and well-established political processes, a strong legal system, competent governance, and an independent bureaucracy. Additionally, strong legal frameworks protect property rights and robust rule of law mitigates corruption.
Strong Labour Market and Economic Growth
The employment index has surpassed pre-pandemic levels of 130 and is expected to continue into 2022, thereafter moderate growth in line with activity is expected. Together with business investments picking up, due to strong balance sheets, rising business confidence and steady decline of general uncertainty, the economy has a favourable outlook with GDP growth forecasted to be 5% in 2022.
Strong Property Demand
The property listing time on the market has begun to see a decline, with a record number of auction rates across most capitals above 91%, while the clearance rates reaching 90% in Canberra and above 75% in both Sydney and Melbourne as of June 2021. The buyer demand is at an unprecedented level and is likely to remain high. Furthermore, government incentives are encouraging increase housing demand from First Home Buyers and Owner-Occupiers, fuelling more demand for property.
Australia has a growing population that is projected to hit 38.8 million by 2061, a significant increase of more than 50% over the next 40 years from the current population of 25.6 million. This will create a huge demand for dwellings, fuelling the thriving real estate market.
Strong Global Ties
Australia currently has a strong network of 15 free trade agreements granting local exporters preferential access to markets across Asia, North and South America. Furthermore, it is in further trade negotiations with the UK, EU, and India. In 2020, Australia joined the world’s largest free trade agreement, the Regional Comprehensive Economic Partnership (RCEP). The RECP encompasses 2.3 billion people and 30% of global GDP. Investors trust Australia as a stable and highly profitable destination for investment capital and its sustained investments across the years demonstrates its appeal.
Did you know?
Despite the pandemic, the major capital city property prices in Australia have surged 11.9% year-to-date as of June 2022, yet there is still a shortage in the supply of properties for sale.
Australia has experienced two decades of housing price growth and the trend is still ongoing.
Australians are ranked in the global top 10 for skills, this stems from the above-average spending on education according to OECD, which leads to seven Australian universities being ranked in the world’s top 100.