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Written by Kris Wrenn – Senior Adviser
This month The Economist Intelligence Unit (EIU) has once again named the most liveable cities. Australia has landed 4 cities in the top 10, an incredible feat.
A quick background on the EIU; they have one of the largest and most experienced analyst teams in the world, with over 190 full-time country experts, industry analysts and economists. The report, although just a tool, is useful when considering long term property investment options. Australia has faired so well through COVID-19, there has been a considerable shift in what people around the world now consider important. Open spaces, health care systems and places like Australia seemingly top the list.
According to the Global Livability Index 2021, the 10 most livable cities are:
1/ Auckland – New Zealand
2/ Osaka – Japan
3/ Adelaide – Australia
4/ Wellington – New Zealand
5/ Tokyo – Japan
6/ Perth – Australia
7/ Zurich – Switzerland
8/ Geneva – Switzerland
9/ Melbourne – Australia
10/ Brisbane – Australia
It’s important to point out here that cities are ranked on more than 30 qualitative and quantitative factors across numerous categories; stability, health care, culture, environment, education and infrastructure. COVID-19 has added new indicators such as stress on health care resources and restrictions around sporting events, schools, entertainment and so on and this has helped put Australia in the limelight.
The Austrian City of Vienna which has consistently ranked near the top over the last several years came in 12th. It’s argued that this is because cities in lockdown that are experiencing stress and hardship from COVID-19 fell down the ranks. European cities are expecting to show a big improvement next year in the ranks, especially if Australia and New Zealand don’t re-open their borders to travellers soon. Some European and North American Cities have aggressively rolled out their vaccination programs and are in the process of opening up and getting back to some normality.
This list does not take affordability into account, with house prices in both Australia and New Zealand reaching all time highs. The average house price in Auckland is $1,219,183, up 16.5% in a year. This compares to Australia’s house prices, which jumped 14.3% in a year on average. According to Core Logic Data, the average Australian property buyer would have paid almost $150,000 less if they were in a position to buy five years ago. In 2016, the median value of a property in Hobart was $341,500, that median has slid up to an eye-watering $548,686 (Domain). Across combined capital cities the median value of a property – including apartments and houses – has crept up by almost 30% in five years (AAP/istock/Getty). Although interest rates are low and money is cheap, first buyers are finding it increasing difficult save for a deposit because of the rapidly rising prices, low wages growth and the low interest on saving.
I don’t believe this growth is sustainable, but I do believe that more people than ever will want to come and live in Australia once our borders re-open? What this means for our property prices will depend on any Government measures imposed to cool this property boom, but I do believe that long term, a property purchase in a Bluechip Australian property will benefit your investment portfolio.
I’d like to point out that Melbourne has been number one or number two on this list for the last 9 years with Sydney and Adelaide constantly featuring in the top 10 list. Melbourne and Sydney have seemingly suffered ‘temporarily’ from the extended lock down and have dropped down the ranks, Sydney now sitting in 11th place. It’s nice to see Brisbane on the list for the first time. Anyone living in Brisbane will agree with me that Brisbane is very liveable, has the benefit of open spaces, the north coast and sunny coast within an hours drive and great weather. Perth secured spot number 6 and is Australia’s fastest climber. Perth is the only City on the list that received a perfect score in three categories; healthcare; education; infrastructure. Hobart didn’t make the top 10 but I think it will be there next year, I could certainly live there. Seaside and regional areas with infrastructure, health care and education are in demand as people move into these ‘green’ spaces on the back of changing values from the fallout of COVID-19.
Very noteworthy is that Adelaide has been voted Australia’s most liveable city in a recent National survey. Safety, affordable housing, social cohesion and lack of traffic helped push Central Adelaide and the Adelaide Hills to this enviable spot. Sydney’s Sutherland Shire was runner-up, with inner Perth number three. The change in people’s priorities since COVID-19, like health care, green spaces, jobs and community have changed what people treat as important when considering where they want to live, and where they can afford to live, whilst enjoying a certain lifestyle.
If you think you could be doing more with respect to property, book a call with your adviser to discuss possibilities. Likewise, to talk more about a potential property purchase or to review your existing properties book in a call with Hudson’s property specialist Michael Taylor.