Sydney a ‘World Class’ city and a safe haven for Asian investors: Savills

The inclusion of Sydney in Savills landmark World Class Index highlights the city’s emerging standing in the world of prestige international property offering a safe haven for international investors, particularly from Asia.

The 2011 Savills report on the world’s 10 leading prestige property locations for international investors suggests Sydney is positioned to benefit from the both the “old” and “new” world economies that it bridges.

Savills NSW research director Simon Hemphill believes Sydney is seen as a stable old-world investment choice with a well-established luxury housing market, while also in close proximity to the booming new-world economies of Asia Pacific.

Luxury Sydney property also represents very good value on the global stage, according to Savills, which ranks Sydney as the cheapest location for global billionaires, while also offering the largest size of homes for the super-wealthy, at almost 1,900 square metres.

“Overall, Sydney still offers international investors great value and is extremely well-located to take advantage of Asian wealth if and when its policies restricting international buying are relaxed,” Hemphill says.

“Sydney is geographically very well placed to benefit from investment from frustrated Chinese and other Far Eastern investors, but they will need to open up their markets to such investors to trigger this,” according to Savills international research.

“The city’s undersupply of accommodation and high in-migration plus restrictions on new development, due to zoning and geography, are likely to keep prices the highest of any Australian city.”

Savills describes Sydney as beginning to display many of the common characteristics of the World Class city – constrained land supply, increasing pressure from overseas investors and high demand for prime accommodation – but it is unusual in offering very spacious living accommodation in relation to other leading international investment locations.

“Asian interest in residential developments within the Sydney metropolitan area is at an all-time high, with both Asian developers and private investors making substantial investments in the market,” Hemphill says.

“Anecdotally, almost a third of residential projects in the Sydney metropolitan area currently under construction or being actively marketed are owned by Asian development companies.

“Private investors from Asia also make up a significant portion of buyers for inner-city residential developments, such as the Frasers Property Central Park development in Broadway, in the Sydney market. Indeed, circa 25% of purchases made so far in the Central Park development were by south-east Asian private investors. This trend is set to continue, given the nature and location of a number of developments currently mooted in and around Sydney,” he says.

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