Why Australians should purchase off the plan property in 2023: Iwan Sunito
Conditions are right for smart owner-occupiers and investors to swoop on off the plan property in Australia.
That's the view from developer Iwan Sunito, the chief executive of Crown Group and founder of the recently launched development company One Global Capital.
Sunito says underlying conditions in the Australian property market are sound, and green shoots of recovery will soon appear.
“Growing numbers of Australians are choosing to live in units or apartments, to the point that they now account for 47 per cent of total dwelling commencements in the five years to 2018, up from 42 per cent in the 10 years to 2018," Sunito says.
"People want the convenience of living close to amenities like cafes, shopping centres and transport links.
"'Empty nester downsizers’ are certainly among those seeing the practical, lifestyle benefits, helped by capital gains they have made, so apartment living is increasingly common and the preferred option."
Suntio cites the new stamp duty reforms in NSW, which means eligible first home buyers can now opt-out of paying the upfront burden of stamp duty and instead pay a smaller annual property tax.
"The State Government scheme is enabling young couples and individuals looking to spend up to $1.5 million on property for the first time to cut up to two years off the cost of saving for a deposit," Sunito notes.
There's also the case for investors coming into the off the plan market, with strong rental yields being achieved due to the demand hugely outstripping supply.
“We know that with borders reopening, demand for apartments is rebounding in the rental market which is forcing rents to increase, making returns more attractive to investors. International students, overseas and interstate workers are returning.
"For example, China announced in late January that its citizens studying with foreign universities must return to in-person classes. This alone spells the return of around 40,000 people to Australia. The Commonwealth Government’s migrant policy also aims to deliver 200,000 skilled people annually over the next five years.”
CoreLogic's December 2022 update showed Australia's three largest pegged Sydney's gross rental yield at 3.89 per cent, Melbourne at 4.18 per cent, and Brisbane at 5.17 per cent.
"Given the return of tertiary students, people moving interstate and forecast new arrivals, it is hard to see this upward trajectory changing over the next few years at least."
