Victoria state is Australia’s first-home buyer’s haven, plus more updates

For PropertyGuru’s real estate news roundup, Australia’s housing market is incredibly challenging for first-home buyers, but Victoria has emerged as the state with the highest number of first-home buyers in the country. In other news, the coming years will accelerate shifting supply chains, with manufacturing and production locations diversifying across Southeast Asia. Lastly, Dubai real estate prepares for yet another new peak in 2024, with a record 90,000 new homes joining the market.

One state in Australia emerges as new first-home buyer haven

Accessing Australia’s housing market is incredibly challenging for first-home buyers, but one state is emerging as somewhat of a haven for first-home buyers, with several factors helping to buoy first-home buyer activity.

According to PropTrack, Victoria has emerged as the state with the highest number of first-home buyers in the country, and despite high interest rates and surging house prices, the number of first-home buyers nationally is higher than the 10-year average.

Rising incomes since the pandemic have been insufficient to offset increases in home prices and the surge in mortgage rates resulting in the worst housing affordability conditions on record.

Increasing house prices and reduced affordability highlight the challenges in accessing Australia’s housing market and are associated with delayed home ownership.

Census data shows that nationally, the rate of home ownership has been lower for almost each successive birth cohort since the 1947–51 birth cohort and importantly research shows that as these younger groups age, they are less likely to ‘catch up’ and buy a home.

However, despite the current challenging purchasing environment, first-home buyer numbers nationally – though well-off record-high pandemic numbers – remain above the average seen over the past decade. The proportion of new lending to first-time homebuyers has also risen from levels seen in 2022 before interest rates began to climb.

So, what’s behind the resilience in first-home buyer activity?

Supply chain shifts to drive more manufacturing to Southeast Asia – JLL

The coming years will accelerate shifting supply chains, with manufacturing and production locations diversifying across Southeast Asia. JLL reports that Southeast Asia and other developing economies in the APAC region stand to be net beneficiaries of this trend.

Over the past few years, Chinese companies have begun exploring the expansion of manufacturing outside of China. “In Asia Pacific, this near/re/friend shoring trend has resulted in the China+1 strategy where companies add additional manufacturing bases outside of China to hedge against supply chain disruptions by reducing heavy reliance on a single country,” said Yin Hong, Head of Logistics & Industrial, JLL China, in RETalk Asia. “At the same time, we see that Chinese companies are also expanding their footprint in the region to build on opportunities offered by Southeast Asian economies.”

The driving force behind this trend is not only the need for supply chain diversification, but also to capitalise on the strong economic fundamentals of this region, including a large and growing population and labour pool, favourable costs, and various incentives. From a manufacturing investment perspective, these factors position SEA and other emerging economies as major manufacturing hubs for global markets.

JLL estimates China holds the lion’s share of manufacturing FDI in the region. However, this dominance is gradually diminishing as Southeast Asian countries and other developing economies in the Asia-Pacific are experiencing faster growth in FDI inflows compared to China. This shift is partly attributed to Chinese investors increasingly expanding their investments abroad, contributing to the narrowing gap in FDI distribution across the region.

A total of 90,000 new homes to be built in Dubai in the next two years

The property sector’s growth is expected to continue over the next two years, with a record 90,000 new homes joining the market as Dubai real estate prepares for yet another new peak in 2024.

According to data released by Dubai-based fäm Properties ahead of The Game Changers – Dubai Real Estate Summit, 41,800 units are expected to hit the market in 2025, setting a record for a single year. This will bring the total number of units to 48,400 in 2026.

PropertyNews.ae reports that with 1,034 projects totalling 288,020 units currently under construction, the surge of new properties highlights the market’s ability to meet demand and reflects Dubai’s strong commitment to growth and expansion.

With the total for 2024 already at 99,779 and growing, the record of 101,654 launched units annually set in 2023 appears to be surpassed.

The Property Report editors wrote this article. For more information, email: [email protected].