Page 97 - Mirvac Residential Magazine_Issue_15

MARKET RESEARCH:

Consider the following: Migrants cluster in Australia’s
largest two cities and are relatively
• The Australian National sticky, providing strong support to
Accounts reported that while the urban housing markets over time.
national economy contracted in Over 85% of foreign-born migrants
the September quarter by 1.9%, that arrived in Australia after 1991
a period which saw 11 million live in large capital cities. In fact,
Australians in lockdown, the at the last Census, two in every
household savings rate lifted five residents of both Sydney and
BRIGHT • Households in Australia have Over a third of all households speak
strongly from 11.85% to an
Melbourne were foreign-born.
extraordinary 19.8%.
a language other than English at
home.
built a formidable financial
buffer and as long as we do not
Within cities, ethnic groups
return to extensive lockdowns,
cluster with those that share
we can expect household
LIGHTS spending will drive strong of life. People often seek similar
their distinctive culture or way
economic growth over the
nationalities or customs amongst
course of 2022 and likely into
neighbours and a desire to live in
2023. Risks of new variants are
proximity to religious or cultural
likely to see Australians remain
affiliations which often extends
relatively cautious about forward
to their children’s schooling.
overseas travel plans, resulting
AND A Alexandra Gray finds plenty • Household spending will be urban retail and open spaces where
Perhaps it’s best evident in the
in reduced leakage of spending
offshore and more firepower
treasured local cuisine, service
spent in Australia as households
providers and meeting places
draw down their savings war-
Mirvac Head of Research
provide the connection to home
chest over the next one to two
countries, values and ancestry.
years.
These are strong pulling factors
for urban life that often result in
BRIGHT of cause for optimism as the supported by income growth preferencing proximity to families
and community, creating a sticky
too. The Reserve Bank of
nation enters its recovery
geographical ring-fence.
Australia expects wage income
to keep rising through next year.
When choosing to buy a residence,
period with our cities
Together with rising job ads and
it’s important to take a longer term
strong demand for workers in
view. At Mirvac, we are strong
primed for growth.
most sectors, higher aggregate
OUTLOOK And remember that demand-side quality residential. Over the next
believers in urban cities and
labour income will be a strong
support for housing markets.
decade, Australia’s largest capital
cities are forecast by the Federal
Government to remain young
drivers like population growth
with ageing more pronounced in
are likely to be recovering next
regional Australia. Peak age cohorts
year and potentially back to big
to be in the range of 20 to 49 years
Federal Government’s Centre for
Putting aside the pandemic and
old which will require a diversity of
Population expects Australia to
the interruption, stress and weakness with an imbalanced pre-Covid levels from 2023. The for large cities in 2031 are expected
supply/demand backdrop.
hardship many have gone through, However, the economy weathered return to high migration levels, housing, employment, services and
the past two years have covered the storm with large policy support for a developed economy. Further social infrastructure. Throughout
extraordinary periods of extreme from government payments and they expect the four largest cities the rest of Australia, peak age
economic contraction and stunning subsidies, and a reduction in official to be home to three in four new cohorts are expected to be between
recovery. Perhaps the housing interest rates to near zero. Australians by FY24. And one in 60 and 75 years old.
market exemplifies this trajectory two new residents to Australia Like many European countries,
best. While some of those supports have is expected to call Sydney and Australia’s major cities have
ended or tapered, low rates are Melbourne home by this time.
While 2021 ends the year with signs likely to be a feature for some time, multiple functional layers that
of ‘cooling’ in the housing market, notwithstanding they will almost This will have significant impact don’t exist in the same number
we think it is best to look through certainly be higher than what was on our cities, and inner urban areas elsewhere. For example, the hubs
fluctuations and judge how the available in 2021. Already by year dominated by apartments. Looking of commerce, culture and public
underlying growth path will play end, fixed mortgage rates under 2% at migration patterns of migrants administration are concentrated
out. cent have largely gone. The need over the five years to FY20 shows in just a few major cities. And
for emergency support measures, that 75% of new overseas migrants it is our biggest cities that have
Housing markets have no shortage that were a feature of 2020-21 to NSW reside within 30km of the concentrations of deep knowledge
of colourful opinions about where are no longer required against a Sydney CBD. For new overseas sectors and skills that will continue
to next. For example, sharply backdrop that is improving. migrants to Victoria, this is even to be best equipped for a digital and
reduced overseas migration higher at 80% residing within global future.
was said to lead to a prolonged 30km of Melbourne CBD.
94 ISSUE 15 SUMMER 2022 The Right Place by Mirvac The Right Place by Mirvac ISSUE 15 SUMMER 2022 95