CSIProp UK & Australia Investment Guide - Preview (1)

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CSIPROP INVESTMENT GUIDE Australia & United Kingdom

Research Report 2019/2020: 11 Australia & UK





Perth 19 Melbourne 23 Research Report Sydney 37 2018: Australia & UK Brisbane 40 Australia Purchase Cycle Guide 45




Making A Difference Our People 5 Our Mission 6 Our Portfolio 7 Foreword 9





02 02 03 Our Promise 05 Our Team 07 Our Mission 08 13 14



Research Report: Australia United Kingdom 57 23 London Perth 62 27 Northern Melbourne Powerhouse 41 Liverpool Sydney 71 44 Manchester Brisbane 77


Birmingham 84 UK Purchase 90 CyclePurchase Guide Australia Cycle Guide

49 04 57 05



Research Report: United Kingdom Reference 98 62 London 62 Manchester 62 Liverpool 62 UK Student Property



Research Report 2019/20 03Australia & UK Overview The global economic landscape is shifting. The year 2018 saw a marked departure from an economy that was neither too hot nor too cold, to one dominated by trade conflicts and interest rate concerns. China’s continued slowdown, the intensifying trade war tensions between US and China, Fed interest rate hikes and looming uncertainties in the Eurozone — these are clouding the global econcaught in the crossfire. Closer to home, Malaysia and Singapore deal with political change and challenges within the housing markets.

Beware the investment activity that produces applause; the great moves are usually greeted by yawns.

Property: How the Markets Measure Up Research by Knight Frank has found that property remains a preferred investment for the ultra-wealthy despite the growing popularity of cryptocurrency.

Australian and UK property, in particular, hold the greatest allure for Malaysian and Singaporean investors. While largely due to familiarity and sentiment, this is also due to the markets’ resilience and strong performance in terms of capital appreciation and returns.

NZ UK Australia Hongkong Malaysia US Singapore

House Price Index by Country, 1995 - 1H2018 500


Over the last 15 years, UK and Australia charted the strongest performance in house price growth after New Zealand (Figure 2), with London and Melbourne demonstrating the highest increase among the leading cities in both countries (Figure 3). Manchester and Sydney came in at an impressive second place with house price growth well above the national average.

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Figure 2: The UK and Australian property markets are the best performing markets for house price growth, after New Zealand (with the exception of Australians and Singaporeans, foreigners are not allowed to buy property in New Zealand). Source: Abelson & Chung, ABS, REIA, NAPIC, Data.gov.hk, URA, HM Land Registry, Economic Research Division, Federal Reserve Bank of St. Louis, & RBNZ

Research Report: Australia

Housing is one of Australia’s largest assets and the foundation of its household wealth, financial system and economy. The Bank of International Settlements (BIS) pegged Australia as having the 6th highest rise in annual property prices in the world over the last 5 decades, with house prices surging 6556% since the 1960s at an average increase of 8.1% per year.

Research Report: Australia


AU/NZ House Price Growth Among Highest in the World

Index, 1970=100


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UK Australia


Ireland Norway


Canada 3000

Research Report: Australia

US Japan



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Research by BIS and UBS shows that Australia house price growth is among the highest in the world. Source: BIS & UBS

Data shows 9 out of 10 properties have been sold on the market at a profit in spite of the slowdown in the housing market. Indeed, the market saw a moderation in 2018 with Sydney being the hardest hit and, to a lesser extent, Melbourne, Brisbane, and Perth, due to stricter regulatory and lending measures which have

Yet, the Australian housing market remains underpinned by strong population growth which directly corresponds to demand for housing, especially in Melbourne, Sydney, Brisbane and, increasingly, Hobart. Australia’s population grew by another 1.6% to 24.7 million in the 12 months to the end of Sept 2017, adding another person every 1 minute and 26 seconds.

United Kingdom The clock’s ticking and it’s crunch time for Brexit. Concerns are mounting as to whether the UK will be able to weather its ‘divorce’ from the EU. For sure, there will be significant shockthe housing market, but we are positive that the political and economical turbulence, and slowdown in the property market will be a short-term one. significantly, however, will be the agreements on future trade and migration arrangements, as a reduction in immigrants could result in labour shortages and further inflation. A shortage in labour in the construction sector will cause a slowdown of on-going developments.

Research Report: United Kingdom

This is no small matter. Brexit or not, one of the UK’s biggest issues has been the

critical undersupply of housing — research shows that England is facing a backlog of 4 million homes! The construction sector has already been hard hit, with worker shortages at a record high earlier in 2018. Further hits to the construction sector will inevitably cause a reduction in supply and increase in price. style changes mean continued growth for the build-to-rent/ private rental sector. The number of households living in private rental housing has doubled over the last decade, and a Knight Frank report shows that 1 out of 4 households will be renting privately by the end of 2021.

Research Report: United Kingdom




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According to data by Knight Frank and the English Housing Survey, almost 1 in 4 households will be renting privately by 2021. Source: The Guardian, Knight Frank Tenure Distribution Model, EHS, DCLG Ultimately, and, despite the speccomparatively strong returns and lower risk compared to other countries. This, combined with the much weakened pound and low interest rates will continue to underpin demand from overseas investors. Meanwhile, property price inflation

has slowed down, rising at the slowest annual rate for almost five years, dragged by falling London property values. House price growth is now at 0.5% in the year to Dec 2018 compared to 2.6% in 2017. Needless to say, this cheaper currency, has been a real draw for investors.

Tenured distribution in England (%)

Research Report: United Kingdom

Growth in Tenure of Private Rental Housing Private rented Owned or shared ownership Social rented

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