Australians continue to bank on housing as pathway to wealth
A shortage of supply has only strengthened appetites for entering the residential property market
2 min
Residential real estate in Australia accounts for $9.8 trillion, almost three times more than superannuation savings, new data reveals.
In signs that residential real continues to be the most popular pathway to wealth in this country, CoreLogic Australia’s Housing Chart for the June quarter shows that Australian superannuation is valued at $3.5 trillion while Australian listed stocks sit at $2.8 trillion and commercial real estate at $1.3 trillion. Those figures are set against borrowing levels with Australian mortgage holders in debt to the tune of $2.2 trillion.
The results come on the back of growing calls to address housing affordability issues and concerns about the effects of rising mortgage repayments caused by a 4 percent increase in the cash rate in just over 12 months that have left more households in financial stress.
The CoreLogic report also revealed that national home values have continued to rebound this quarter, up 2.8 percent, although they are still down -5.3 percent over the past 12 months.
CoreLogic research director Tim Lawless said the lack of housing supply was putting further pressure on rising home values.
“Through June, the flow of new capital city listings was nearly -10 percent below the previous five-year average and total inventory levels are more than a quarter below average,” he said. “Simultaneously, our June quarter estimate of capital city sales has increased to be 2.1 percent above the previous five-year average.”
CoreLogic head of research Eliza Owen said for investors, motivations for the rental hikes imposed on tenants was less clear. While she noted that many investors had not passed on the full impact of the increase in the cash rate – ATO data from 2020-2021 financial year showed that 47.1 percent of investment properties were negatively geared – the economics of supply and demand were still a factor.
“Irrespective of mortgage costs, rents can generally only rise substantially if the rental market is competitive, and tenants cannot find alternative accommodation to bargain with; in other words, rents rise when demand for rental accommodation is outweighing supply,” she said.
“Looking at rental supply in the context of rate movements, it’s clear that a tightening in the rental market occurred well before interest rates started to rise. The rental market started to tighten in mid-2020, while the cash rate wouldn’t go up for another two years.”
Earlier this week, Ray White chief economist Nerida Conisbee noted that while construction costs, particularly for key materials, had started to ease, building approvals were failing to meet demand for housing.
“Building approvals are currently at a decade low and it will take some time for the pipeline to build,” she said. “In the meantime, population growth is particularly strong. Last year, we saw an increase of almost 500,000 people.
“That means that in just one year, we need roughly an additional 200,000 homes. With 173,000 homes built last year, we are falling short in just one year by 27,000 homes.”
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More than 10,000 homes, an expansive central park and a mix of hospitality, retail and wellness facilities will form Azizi Developments’ first master-planned community in the emirate.
2 min
Sharjah is set to receive one of its largest new residential communities, with Azizi Developments unveiling plans for a US$8.1 billion master-planned precinct containing more than 10,000 homes.
Named Azizi Florence, the freehold development will comprise 1,130 villas, more than 6,000 townhouses and 3,500 apartments. Three-bedroom townhouses will start from US$515,000, with an indicative rate of US$231 per square foot of saleable space.
The project marks the Dubai-based developer’s first move into Sharjah, expanding a portfolio that includes the planned Burj Azizi skyscraper and the Azizi Venice community in Dubai.
A park at the heart of the community
Rather than treating landscaping as an afterthought, Azizi Florence will be organised around a 1.7 million sq ft central park.
The wider precinct is planned as a self-contained neighbourhood combining homes with retail, hospitality, education, leisure and wellness facilities.
Six residential clusters will sit within the development, each with its own park, clubhouse, community centre and landscaped gardens. The approach reflects a broader shift across large Middle Eastern developments, where greenery, recreation and everyday convenience are increasingly central to the residential proposition.
The scale of Azizi Florence suggests it is intended to function as a neighbourhood rather than a collection of housing estates. Its mix of housing types should also give the project broader appeal, accommodating apartment buyers alongside families seeking townhouses or standalone villas.
Azizi expands beyond Dubai
Azizi Developments has delivered more than 45,000 homes to buyers from over 100 countries and says it has approximately 150,000 units under construction.
Much of its growth has been concentrated in Dubai, where its portfolio extends across Palm Jumeirah, Mohammed Bin Rashid City, Dubai South, Sheikh Zayed Road and Downtown Jebel Ali.
Its most prominent current project is Burj Azizi, which is intended to become the world’s second-tallest building. Azizi Florence represents a different type of undertaking: a low-rise, family-oriented community built around public space and daily amenity.
For company founder and chairman Mirwais Azizi, the Sharjah project also carries a personal connection. The emirate was his first home in the UAE more than three decades ago, adding a symbolic dimension to the developer’s expansion.
Sharjah’s residential ambitions grow
Although Dubai and Abu Dhabi have traditionally captured much of the international attention directed at the UAE property market, Sharjah has been steadily broadening its residential offering.
Large freehold communities such as Azizi Florence have the potential to attract both local families and international purchasers looking for comparatively accessible entry points into the Emirates’ property market.
At a starting price of US$515,000, the project’s three-bedroom townhouses will sit well below the cost of equivalent family homes in many of Dubai’s more established luxury communities.
The ultimate appeal, however, will depend on execution. At this scale, the quality of the public realm, connections between residential clusters and delivery of the promised supporting infrastructure will be as important as the homes themselves.
If those elements come together, Azizi Florence could help establish a new benchmark for large-scale residential development in Sharjah—and give buyers another option beyond the UAE’s better-known property markets.
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