Melbourne’s future prospects continue to be the subject of much debate, but a new international report is picking the city as a rising star of the global prime residential sector.
In fact, Victoria’s capital comes in at number two on a list of second tier cities with the potential to show strong residential property price growth in coming years.
According to the report by Candy & Candy, Savills and Deutsche Asset & Wealth, as the world’s top tier cities start to show signs of becoming fully valued investors are looking to alternatives in second tier cities.
Savills World Research director Yolande Barnes said the report identifies 12 cities likely to out-perform the prime world cities with growth from a low base as they become more fully invested.
“Prices in these rising cities are generally much lower than in the world cities, which makes them more accessible and potentially attractive to yield-seeking real estate investors.”
This is not actually the case for Melbourne where, according to the report, prices for a two bed apartment typically range from $320,000 to $675,000.
Barnes said Melbourne had one of the highest priced real estate markets on the list, thanks to its premier status and the strength of the Australian economy.
But it would provide strong “safe haven” status and was likely to become more heavily invested under Australia’s "Golden Visa" scheme.
As a city vying hard with Sydney for dominance, Melbourne was one of the most highly developed and high-functioning cities on the list.
Barnes said that, as an important financial centre in the Oceania region, it had strong claims to world city status – but had a very strong rival in its more prominent neighbour.
“Like many of our rising stars, it has a strong tech and R&D sector which positions it well for future economic development and prosperity.”
Candy & Candy CEO Nicholas Candy said that with $10 million to invest outside the EU he would choose Melbourne.
“Australia has enjoyed a phenomenal 21 year run of solid economic growth and the property market is diversifying quickly as it continues to attract increasing levels of capital, from Australia itself, China and overseas.”
The top 12 rising cities for global real estate investment are:
1. Tel Aviv, Israel
2. Melbourne, Australia
3. Miami, USA
4. Chicago, USA
5. Dublin, Ireland
6. Panama City, Panama
7. Beruit, Lebanon
8. Istanbul, Turkey
9. Cape Town, South Africa
10. Jakarta, Indonesia
11. Lagos, Nigeria
12. Chennai, India
As well as looking at the economic performance and potential of the 12 cities, the report took into account a broad range of factors. These included English as a first or second language, the presence of a well-educated population, and favourable conditions for international companies.
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