(To view the above video in Chinese please click here.)
Packing your bags again. With the unprecedented lockdowns and re-openings of recent years, we have seen two dramatic shifts in population out of, and back into, the major capital cities. These are driving some remarkable trends in housing demand, rents and pricing.
Doing a big U-turn. The COVID years were marked initially back a hurried flight from densely-populated cities, in search of a socially-distanced lifestyle. Since then, there has been a massive population rebound within cities, partly accelerated by a renewed migration boom.
A broader uplift in rents. Amid a lack of available housing and a broad surge in rents, there is a widening performance gap taking hold, with city-centre and inner-urban rents rising more strongly, as tenants compete for a finite pool of housing closer to the central city cores.
Pricing patterns are clearly shifting. The pricing uplift of 2021 was clearly led by a range of lifestyle markets in the bush or by the beach. That pattern is unwinding with the return to work and living in the city. Inner-city markets have more scope to rise, given relentless demand.
Finding the next hotspots. We can identify forthcoming hotspots given the local patterns of housing demand and supply. Through this lens, we see more urgent undersupply in the major capital cities, and some oversupply risks in select sea-change and tree-change markets.
Follow the people (and their money). Out of these dramatic shifts, there are clear tactical investor choices ahead. There is a broad pattern of housing undersupply that will take some years to unwind, with key hotspots likely around specific parts of major capital cities.