RESIDENTIAL MARKETS

Approximately 70% of Australians own or are buying their own houses. Originally the Great Australian Dream was to own a free-standing house on a quarter acre parcel of land. The resulting sprawl, in Australian cities, saw the introduction of apartment buildings. Typically 3 storeys and no lift. During the 1960s high rise residential buildings proliferated, particularly in Sydney. By 1980 planning restrictions eliminated further high rise development. By the mid 1990's under pressure from the State Government to increase urban density, local government allowed widespread  high density high-rise residential development in traditional commercial precincts. This put further pressure on the shortage of houses and by 2002 created for the first time an oversupply of apartments in Sydney

THE RENTAL MARKET

Between the 1950's and the 1990's the Sydney rental market vacancy rate has hovered between 1-3%, while most comparable Western cities of the world have vacancy rates of 6% to 10%. By early 1996, Sydney has a rental crisis, with an acknowledged vacancy rate of less than 1%, and prime Lower North Shore suburbs have an official vacancy of 0%. At the time returns from residential investment property were approximately 5.5 to 6% pa. gross. Such a return would net between 4 and 4.6% to the landlord. Very generally, property values in Sydney increase at a remarkably steady rate, that varies between 4 and 7% above the rate of inflation (inflation has remained at or below 3% in recent years). Therefore including rent income, handsome gains over extended periods are the norm. Between 2001 and 2003 Sydney residential property values soared, in many instances increasing by up to 100% and often more than 50%. A feature of this rapid increase was the conversion of young tenants into first time buyers. The Government's First Home Buyers Grant of (originally) up to $14,000 being the catalyst. While the change placed pressure on the sales market the rental market softened and rents dropped to approximately 4% gross, a 30% fall. It would appear that residential investors in the Sydney market are assured of either handsome rent returns or solid capital growth.

POLITICAL

Australia has a three tiered system of democratic government based on the Westminster system.

• The Federal government: based in the Nations capital Canberra, attends to matters of national importance, such as defence, treasury, and immigration.
• The State governments: are responsible for Transport, Police, Education, etc

• Local government: or "councils" are responsible for managing the local affairs of the community.

TIP: On March 2nd 1996 the people of Australia voted into power a conservative Federal Government, and as a consequence the economy has benefited from business and consumer confidence with the value of property steadily increasing in value.

Web Author: Maurice  Nash  Updated: January 02, 2004