Melbourne’s credentials as Australia’s “most attractive city” were “due to its stronger rental growth supported by tight vacancy,” CBRE’s Investor Intentions Survey 2018 states.
Only Tokyo was more popular than Melbourne with the 366 respondents, including real estate funds, developers, companies and others, polled by the property sales and research firm.
Brisbane came in at No. 8 — which was Melbourne’s position last year.
“Investor demand for real estate is being motivated by the objective of securing income streams and asset class diversification,” the report states.
“As interest rates gradually move into the upward cycle, there will be limited room for further yield compression to drive value growth.
“For the second consecutive year, less investors selected capital value growth as the major motivation to invest in real estate.”
Investors were also concerned about property being overpriced, with the selection of this as the “greatest threat to property markets” rising from 2017.
Of those polled, 70 per cent were based in Asia, 18 per cent primarily in Western Europe, the Middle East and North America, and 12 per cent Pacific.
CBRE expected a slowdown in Chinese outbound investment to continue following the introduction of new capital controls by the Chinese government last year.
“This year’s survey indicates that Chinese investors are less keen to invest overseas in 2018.
“While overall interest remains reasonably firm, fewer investors intend to invest more than they did in 2017.
“Government scrutiny of overseas real estate acquisitions will continue this year, with another set of capital controls coming into effect in March 2018. Real estate investment will be subject to an additional layer of examination.”
TOP TEN PREFERRED CITIES BELOW
5. China tier 2/3 cities
7. Japan regional cities
9. Hong Kong