Scott Keck is Chairman of Charter Keck Cramer, a leading Australian independent, strategic property consulting firm. Scott has over 50 years property valuation experience within the Melbourne market, having begun with the firm in 1968, becoming a Director in 1978, Managing Director in 1984 and Chairman in 2010. As an experienced independent practitioner Scott provides specialist strategic and mediation consulting, including an emphasis on land acquisition for major infrastructure projects.
Fundamental to the performance of the real estate markets will be the impact of progressive population growth and cultural change over the long term. Currently, Australia’s population of approximately 25 million is, according to various sources, about 78% Caucasian and 22% Asian, comprised predominantly of 1st to 3rd generations originating from China, Southeast Asia, India and Pakistan. It is projected this may progressively transition naturally to 30% Asian, 70% Caucasian over the next 40-50 years.
The longer-term economic prosperity and substance of Australia will depend on significant population growth, which is anticipated to be mainly sourced through immigration, predominantly from Asia. As Australia predictably moves towards a population of 45–50 million by 2075, the additional 20 to 25 million residents will, given current geopolitical and trade policies, as well as social and cultural initiatives, be from the broader Asian region, mainly India and China, representing up to 95% of future migration. By around 2075, through this continued process of ‘Asianisation’, Australia’s population will have then transitioned to at least a 60% Asian majority. Australia will then, in every sense, truly be part of Asia, and the cultural, commercial and community sense of being an Asian society will begin to envelope us much earlier.
As Australia’s population increases, the focus will be on the east coast, mainly New South Wales and especially Victoria, igniting population growth in Melbourne and regional areas. In the Australian context, it is noteworthy that Victoria is unusual, being a relatively small state but with the soon to be largest city, which is why it’s regional areas will continue to benefit more than in other states. Into the future, Victoria’s regional areas and townships will strongly benefit by responding to the economic heartbeat of Melbourne as it surges to a of possibly nine million over the next 30 years, and Victoria to 11 million. These growth estimates may likely prove to be conservative as global socio-economic and territorial challenges, especially in the closer Asian region, increasingly contrast Australia as a nation of safety, future prosperity and low sovereign risk.
Melbourne has the capacity to grow to meet its share of national population growth and other responsibilities, as do Victoria’s regional centres notably at Geelong, Ballarat, Bendigo, Shepparton, Albury, Wodonga, and elsewhere. Not only the regional cities, but also many smaller but well-located townships with functional road and rail infrastructure, will contribute to the solution for accommodating and sustaining Victoria’s growth.
Residential supply in all forms, whether for ownership, private or institutional investment, or in response to rental demand including land subdivision, house/land packages, townhouses, apartments, build-to-rent (BTR) student accommodation, retirement, aged and health care, will be in high demand and therefore offer a depth of development opportunity and the conditions for strong capital growth. This demand will be generated not only due to immigration, but also within the existing population, due to generational changes in household formation and the ageing population. Aligned with this major residential expansion will be the need for retail, commercial and industrial accommodation servicing many new growth centres. For patient capital prepared to take a long-term view, now is the time to acquire development sites, significant land banks for future development, and to form appropriate local joint venture (JV) business arrangements and consultancy relationships.
Viewed from another perspective, the prospects for Australia, particularly Victoria, due to the medium to long-term impact of population growth, are likely to be greatly enhanced by a very significant external factor. Since the end of the Second World War, Asian investment has primarily focused on the growth of the region’s own various economies- Japan, Singapore, South Korea, Hong Kong etc. Over the last 10 years, however, the sovereign risk across Asia has increased and many countries are now considered to be of higher investment risk due to concerning political and military regimes or corruption, weakening economies, population collapse, territorial challenges and geopolitical turmoil. In a period that is now strengthening, characterized by ever greater uncertainty and instability, it can be anticipated that a significant portion of Asian investment will shift towards much greater security, but in circumstances that will be familiar and comfortable. This shift is likely to favor Australia as it emerges as the NEW ASIA.