Emerging trends in real estate® – Asia Pacific 2018

Emerging trends in real estate® Asia Pacific is a trends and forecast publication now in its 12th edition, and is one of the most highly regarded and widely read forecast reports in the real estate industry. It is a joint undertaking by PwC and the Urban Land Institute to provide an outlook on real estate investment and development trends, real estate finance and capital markets, property sectors, metropolitan areas, and other real estate issues throughout the Asia Pacific region.

The Australian market is one of the few in the Asia Pacific region to have bucked the trend of slowing rental growth, with rents for Sydney prime offices rising an annualized 25 percent and Melbourne rents at 16 per cent, in the second quarter of 2017.

Cities Most Likely to See Rental Growth in 2018

Other key findings for the Australian market include:

  • Borrowing costs in Australia are higher but Australia remains an attractive investment destination as it's the only market in Asia where you can buy assets with very long leases, but also underwrite annual escalation of between 3 and 4 percent.
  • The challenge for the Australian Real Estate market is lack of choice for investors. Transactions in the first half of the year were down - possibly due to owners being reluctant to sell if there's limited option to buy anything else.
  • There are more buyers than sellers in the CBDs - which has resulted with many investors (including foreign investors) looking outside of CBD options. Parramatta, located 23kms from Sydney CBD, has been described as a "future alternative CBD in Sydney".
  • Alternative assets are becoming popular such as student housing which has become firmly established as an institutional asset in Australia, senior housing seems to be gaining critical mass.

Foreign Purchases of Australian Residential Property, First Half of 2017

Contact us

Ross Hamilton

Partner, PwC Australia

Tel: +61 (3) 8603 0479

James Dunning

Partner, Financial Services, PwC Australia

Tel: +61 2 8266 2933

Tony Massaro

Partner, PwC Australia

Tel: +61 2 8266 2047

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