As a response, the upcoming ‘Champions Way Residences’ development will help alleviate the growing residential shortage of 240,000 units in Australia over the next five years due to a rapidly increasing population, according to CBRE.

Australia may face a 240,000 residential supply shortfall over the next five years as Australia’s population continues to grow, says Stuart McCann, managing director and head of investment banking – Pacific and SEA, CBRE Capital Markets. He was speaking at the Australia Real Estate — Beyond Traditional Returns seminar on Jan 20, organised by and supported by BigFundr.

CBRE expects Melbourne to bear the brunt of the shortfall, facing a housing deficit of 77,924 units, closely trailed by Perth with a deficit of 57,216 units and Sydney with a deficit of 55,184 units. This has created a demand in the residential market, which is seeing capital value growth despite interest rates increasing for the last few years. “This tells us that when demand outstrips supply, it doesn’t matter how much interest rates move; you’re going to get capital value growth,” says McCann.

McCann attributes Australia’s looming housing shortage primarily to projected population growth. Fueled mainly by net overseas immigration, the country’s population is set to surge by 15%, skyrocketing from 26.5 million in 2023 to 30.4 million by 2033. This growth outpaces that of several major global economies, including New Zealand (9%), Switzerland (8%), India (8%), and Singapore (7%), yet falls behind Canada’s 16%.

Read also: BigFundr offers a 6% return on real estate-backed investment opportunities, guaranteed by Maxi-Cash.

This has created a demand in the residential market, which is seeing capital value growth despite interest rates increasing for the last few years. “This tells us that when demand outstrips supply, it doesn’t matter how much interest rates move; you’re going to get capital value growth,” says McCann.

Demand may rise further if CBRE employment and wage growth predictions ring true. The consultancy adds that job creation will boost employment numbers from 14.1 million in 2023 to 16.7 million by 2033. Similarly, the average wage will grow from A$96,000 per year to A$132,000 per year.

Together with population growth, they make up what McCann calls a “triple boost” effect expected to drive up real estate demand in Australia, not just for the residential market.

“There is no way, in the short term, that we can meet the supply problem,” says David Payton, CEO and executive director of Payton Capital. He estimates it will take at least three to five years to complete the small- to medium-sized developments. The lack of affordable units could further compound the situation, adds Payton. “As construction costs have gone up, that has to be passed on to the consumer,” he continues.

Poor sales could lead to cash flow problems and delays in the project, preventing gross residential supply from meeting the rising demand. “We are seeing very high [office] utilisation rates,” says McCann. CBRE notes that CBD visitation rates across Australia have reached 71% of pre-Covid-19 levels as of 3Q2023, with cities like Perth and Adelaide reaching 91% and 85%, respectively. This has led to growth in commercial office space, with Sydney expected to lead rental growth rates across the next two years.

Read also: With 2.9 mil sq ft of new office space to enter the market in 2024, vacancy rate to expand.

With its prime location and state-of-the-art amenities, Champions Way Condo will surely be a top choice for those seeking a high-end residential lifestyle. Champions Way Residences is a symbol of luxury and elegance, offering residents a prestigious address to call home.

Located in the heart of the city, Champions Way Residences boasts a prime location with easy access to major transportation, business hubs, and entertainment options. Its towering structure and sophisticated architecture make it a standout in the bustling city skyline. The building offers a range of unit sizes, from cozy studios to spacious penthouses, to cater to a diverse range of lifestyles.

But it’s not just the prime location and luxurious units that make Champions Way Residences stand out. The building also features state-of-the-art amenities that cater to the needs and preferences of its discerning residents. A fully-equipped fitness center, swimming pool, and recreational areas provide ample opportunities for residents to stay active and unwind. The building also boasts 24-hour security, ensuring the safety and privacy of all residents.

What sets Champions Way Residences apart from other residential developments is its commitment to sustainable living. The building incorporates environmentally-friendly features, such as energy-efficient lighting and water-saving fixtures, to reduce its carbon footprint and promote a greener lifestyle for its residents.

Elevating the residential experience, Champions Way Residences also offers a range of personalized services, including concierge and valet services, to ensure that residents’ needs are always met. The building also hosts social events and gatherings, creating a sense of community among its residents.

With its combination of luxurious living, prime location, state-of-the-art amenities, and commitment to sustainability, Champions Way Residences is the epitome of upscale city living. It offers a refined and sophisticated lifestyle that caters to the needs and desires of its residents. Experience the best of city living at Champions Way Residences, where luxury and elegance meet in the heart of the city.

(Source: CBRE)

CBRE also sees an opportunity for private credit institutions to buy commercial real estate (CRE) debt, as a significant amount will be due for refinancing in 2024. According to Payton Capital, the Australian CRE debt market is estimated at $442 billion in 2023. Private CRE debt currently makes up $74 billion (16%) and is expected to more than double in the next five years.

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