Melbourne, The Hub of Investment in 2018
For many Malaysians who have been involved in property investments in Melbourne, Australia, or even novice who have just begun to jump into the bandwagon of expanding investment horizon in Australia, they have been repeatedly told that this market is over supplied, or is heading south.
But seriously, how much truth lies therein?
We believe that the key to the health of a real estate market is often the Population Growth. The ability of a city to continuously attracting influx of people to live there, and even stealing population from its rival cities, gives a good indication of how the property market is going to perform.
We came across a good article published in Australia, giving a series of clear statistics and news which further supported our take in the Melbourne property market.
| City | Year 2006 | Year 2018 | Growth |
| Sydney | 3.9 million | 5.1 million | 1.2 million |
| Melbourne | 3.6 million | 4.9 million | 1.3 million |
The difference in population between these two cities are now only 200,000 people and if the trend continues to go on, Melbourne will be a larger city in just 8 years.
In relation to internal migration from 2016-2017, Melbourne boasted a net increase of internal migration of 9,200, while Sydney suffered a net loss of 18,100.
Melbourne has been the world’s most livable city for 7 consecutive years. Hence, it is also of no coincidence that some of the world’s largest companies have chosen their Australian bases to be in Melbourne, for instance American’s Amazon & Netherland’s CEVA logistics. Even the local giant retailer, David Jones, has announced moving their headquarters to Melbourne, shifting 820 jobs from Sydney.
There is a saying that goes as such, “Sydney finances, Melbourne produces”. According to the 2016 census, 10 of the top 20 manufacturing centres in Australia are based in Melbourne while 8 of the top 20 financial services centres are based in Sydney.
Melbourne is positioned to be the home of knowledge and research based industries, including pharmaceutical and biotechnology sector. Victoria has attracted 40% of all medical research funding in Australia.
It is no coincidence that major tech companies and startups are heading to Victoria and it is producing more tech graduates than any other states. Its ability to retain talents has been one of the important factors drawing in businesses. Melbourne embraces the diversity and vibrant economical activities at night. Well, it’s a young city! It offers exciting and dynamic night time accomplishments, namely extended time retails, late nights arts and culture and many more to the flamboyant young working class who enjoys the bustles of a pulsating environment. It has made itself cool by offering a lifestyle that attracts the millennials, the talented young professionals that drive the economy.
In our opinion, Melbourne will continue to strive along with its real estate market. Like in every other established property markets, it went through corrections from time to time, but always very slightly and with prices continuing to rise. The population growth has also kept the vacancy low and tenants applying for a property often as soon as it is listed on the market.
