REISA UNSW: Newsletter T2W1

Welcome to Term 2, Week 1 of 2025!

We hope you’ve had a fantastic break and are excited for the semester ahead.

If you are keen to continue learning more about the real estate investment world and want to be the first to hear about our events and opportunities, we strongly encourage you to like and follow the REISA UNSW Facebook and Instagram.

Warm regards,
REISA UNSW Team

Real Estate News

The future of housing as a stable investment in Australia. Will the bubble burst or expand further out?

We’ve all heard of  the infamous 2008 financial crisis and its origins being rooted in a foolish ignorance to the perceived ‘invincibility’ of the US housing market as a form  of investment. However, while the US property bubble ultimately burst due to  significant investor overconfidence and a lack of risk assessment by all major market lenders, one other major driver remains significantly in line with Australia’s current housing market – speculation. 

Everyone in the USA thought property was a surefire way of doubling their money without the traditional volatility of the stock market or a roulette table. Shifting our focus to contemporary Australia, and this similar ‘blind confidence’ could not be any more prominent despite tell-tale signs indicating the risk of major fluctuations. Demand for apartments has doubled since 2021 and 37% of homeowners experience housing stress (Housing Australia), defined as those in the bottom 40% of income spending over 30% of their pretax income on housing costs. While housing remains a necessity, the rapidly growing population in past years has caused it to become an increasingly unaffordable investment. 

Enter the recent election of the Labor government, who have pledged to build 1.2 million new homes in Australia to combat this distress. While some have questioned the feasibility of this project, such a commitment inherently reflects an increasing supply within the housing market. Subsequently, significant volumes of private capital have been invested into Brisbane since COVID, exacerbated by the growing anticipation of the upcoming 2032 Brisbane Olympics. Brisbane housing prices have already risen 50% since the onset of COVID, and this will only expand as apartments save land and housing becomes increasingly scarce. For reference, prices in Sydney grew on average 12.8% per annum while apartments grew 7.6% in the 5 years leading up to the 2000 Sydney Olympics. 

However, such projected growth in a major city may actually lower the cost of housing – let's draw our attention back to the US and their issues with speculation. Not only will property investment increase in Brisbane, but the regional radius surrounding it will see increased demand as well. Since the Sydney Olympics, Western Sydney housing prices have accelerated as people are comfortable moving further away from the CBD. This demand then attracts urban investment from the government, explicated by the construction of the Sydney Metro to cater for this movement. If Brisbane were to follow the same trajectory, the government was to build another 1.2 million houses across the country, and migration caps on students and other groups are already being considered by the Albanese government – it would seem fair to extrapolate that supply is being propelled on a national level while demand is being stifled by an increasing cost of living crisis and reducing incoming population in need of residence. 

Circling back to speculation, a major reason for Australian housing dominance as an investment strategy has always been market confidence. Young people are prepared to experience the aforementioned ‘housing stress’ because the growth yielded will exceed typical mortgage rates of 6%. But with demand shifting out of Sydney and Melbourne and into Brisbane and more urban demographics, the once united approach towards backing Australia's two stable housing markets is slowly diversifying and propelling a third major city – at the potential expense of demand and hence growth in existing dominant markets. In terms of what this means for investors, two potential outcomes are clear. Either the development of Brisbane is met with a rapidly rising demand for housing and property investors are able to capitalise on a plethora of newly shaping opportunities. Or, Sydney and Melbourne are finally let go of, and the bubble will burst in favour of the millions of new dwellings being produced by the government, and eager investors looking to capitalise off mere ‘speculation’ when it comes to the budding Brisbane housing market.

Written by: Georgia Mrkvankova

Thank You To Our 2025 Sponsors:

Real Estate Investment Student Association (REISA), is a student run society founded in 2023 with the objective of providing students with opportunities across all aspects of Real Estate Investment, including Private Equity, Advisory, Development, and Asset Management.

Follow REISA UNSW on Facebook and Instagram!