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Identifying Opportunities for Property Development Companies


06/02/2018

According to industry reports, drivers influencing the desirability of Australian property investment include population growth, accessibility of finance and capital growth. With shifts in government policies and regulations, such as the most recent schemes of the Federal Budget 2017, the Australian property market is abundant, robust and highly profitable. Accessing funds through institutions and leveraging off investments, such as through rental returns, has become more attainable now than ever before. As one of Sydney’s leading property development companies, we often identify opportunity through local and global trends; and present and future possibilities. These trends, along with the factors influencing growth, often shape decisions for development companies when considering their next project.

Local vs. Global Influences for Property Development Companies

Currently sitting at over 24 million residents, the country’s population continues to rise through births and international migration. On average, the total population increases by one person every one and half minutes (ABS, 2017). This not only means more people, but shifts in trends, lifestyles, social and cultural influences, political factors and more. These movements in demographics are also reflected in property on a local scale. A perfect example of this is through the development of residential apartments. Growing numbers of people have led to higher density cities. Busier lifestyles have led to greater demand in infrastructure and accessibility. An advancing workforce has led to a want for greater access to resources. To meet the local demands that have come with this increase, residential developments have successfully provided a solution through the following:

  • Strategic locations in areas that are within close proximity to public transport, shops, entertainment and leisure precincts and other facilities. This means that for those living in apartments, day to day life is made easy from the commute to work, to sourcing groceries locally
  • Affordability in living in certain areas. As opposed to a home, many individuals looking to invest may prefer apartments by means of which they can afford to live in high demand areas. For instance, locations such as Sydney CBD and its surrounding suburbs, beachside residences and new estates are more likely to be abundant in residential apartments or mixed-use developments, in contrast with homes

These factors have also worked in favour of positioning Australia on the global map as a desirable investment hub. Foreign investment in Australia has at times been a contentious issue. The pros however have outweighed the cons and investment in Australian property through direct purchases and joint ventures continues to rise. The Sydney housing market in particular ranks the highest amongst all Australian cities, followed by Melbourne. For reasons ranging from minimal investment risk to lucrative returns, the top 3 reasons international investors choose Sydney are as below:

  1. A stable Australian economy and property market
  2. An additional means of income generated through rental returns
  3. The increasing value of property over time through capital growth

These advantages are just at the tip of the iceberg and sound enough for foreigners to choose Sydney as the place to invest in. Property development has as a result responded to these local and global movements in developing projects that are fit for diverse markets and meet consumer demand.

Present vs. Future Influences for Property Development Companies

The openings that present themselves to property developers often do so with present and future advantages, that is, meeting both short-term and long-term demands. For this reason, we often see property developers securing locations or building sites well in advance, with intent to construct in the future due to forecasted expansion or projects.

For instance, the Western Sydney boom was predicted as a result of future infrastructure including:

  • The widening of the M4 Motorway
  • The development of the Badgerys Creek Airport
  • The expansion of Westmead Hospital

Projects of this nature often boast economic and social benefits through factors such as increasing employment in the region. This also means that areas are predicted to attract more residents, and so the need for property development reaches higher demand.

What are opportunities that present themselves right now?

When designing, constructing and developing for the now, the main advantages are:

Speed

Through the latest technologies, processes and procedures, the construction and development industry has positively increased its levels of efficiency, productivity and delivery. Maintaining high quality standards, as well as safety and security, the development process nowadays can be a rapid and coherent one- delivering within quicker turnaround times.

Adaptability to Trends

Trends and innovations continue to shift year by year. With modern design, property developers are able to engage suppliers such as engineers and interior designers who are kept in the loop on the latest and greatest in the industry. This allows for a higher deal of creativity to be applied, and also, more efficient outcomes. For instance, the growing awareness of sustainability in construction has opened up doors to innovating in applying this principle- such as using recovered materials for contrasting walls and implementing more green elements for the environmental benefits associated with plants and trees.

What are the future opportunities?

Investment

One of the most fruitful advantages of the property market is the opportunity to invest in a venture that will be profitable. Whether a local investor or offshore business partner entering  into a joint venture opportunity, investment brings a plethora or financial benefits and incentives. In a nutshell, the main investment advantages include:

  • Additional income through frequent rental repayments
  • If purchased in a prime location (which is in most cases in present day Sydney), the property value will only increase over time, hence generating more profit in the future
  • Tax incentives in deducting accumulated expenses each financial year

Area Profiles

Different Sydney suburbs bring different and distinct advantages that raise their profiles. For instance, the booming Western Sydney region has great infrastructure plans in the pipeline, while the Eastern Suburbs region continues to uphold the benefits and well-being of seaside living. Whether suburbs are within close proximity to the Sydney CBD, are beachside, are suitable for certain lifestyles, have greater or lesser entertainment precincts, or are better suited for families, each area has its own unique characteristics. As a result, when undergoing a property development project, a high deal of success is dependent on location.

Experience

One of the key opportunities of property developers in the Sydney market is their ability to further their experience. Having a portfolio of successfully completed projects, Cite Group has become one of the leading property development companies in Sydney. We have managed to do this through experience, which has opened the door to learning, understanding the communities we operate in and being on top of market and consumer trends. The longer time spent in the industry, the greater the knowledge and this is one thing we pride ourselves on. Through experience, we are able to identify opportunity when we see it.

Learn more about us here.

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