Speaking at an event hosted by real estate debt investment platform AltX on 1 February at the Kooyong Lawn Tennis Club, social commentator Bernard Salt explained why Australian property owners and investors should feel optimistic about the future of property in Australia.
When comparing Australia's economy to the rest of world, Mr Salt noted it is amongst the wealthiest per capita. And we spend our money on property.
"It should be no surprise that Australians are obsessed with property, because we've been doing it effectively for 80 years since the last war. We've had a hiatus over the last two years, but the numbers are roaring back."
Amid the turbulence of the past few years, repeated interest rate rises and cost of living increases, economic confidence is at an all-time low, as AltX Co-CEO and Co-Founder Nick Raphaely explained.
"Economic confidence, while stabilising now, has certainly fallen from where it was a year ago, however, we have every reason to be positive about the future."
An established leader in the private debt capital space, AltX gives wholesale investors access to a wide range of private real estate debt investments secured by a first mortgage, including direct loan investments and managed funds. Mr Raphaely describes his primary focus as being "custodians of investor capital," with a focus on steady income with capital security.
"Every day, our team is out in the market, identifying, securing, funding and presenting the best quality first mortgage opportunities that we can find to investors," he explained.
Mr Raphaely noted AltX is "vigilant" in its risk exposure in the current market but has confidence in Australia's property resilience.
Mr Salt believes the resumption of immigration to pre-pandemic levels will inject a high level of demand into the property market over the next five years, in both owner-occupier and investment sectors.
He says the already tight rental market is likely to be bolstered by an anticipated influx of students, especially from China. With newly arrived migrants often looking to showcase their success and wealth by buying a home, Mr Salt expects we will see an increased demand in the owner-occupier market.
While immigration is one of the main factors to power the rental and owner-occupier markets in the near future, it's not the only one, according to Mr Salt. Middle-aged millennials and retiring baby boomers are also likely to encourage growth in lifestyle properties outside the major cities.
"In the 1950s, the average lifespan was 69 years, and the average retirement age was 65," he said. "So, you'd expect to have four years in retirement before you dropped dead. Now the average life expectancy is 84, which is almost 20 years in retirement. Our lifecycle has been reinvented to introduce a lifestyle stage." And with a lifestyle stage, he pointed out, comes a demand for lifestyle property.
Over the next 10 years we will also see millennials hitting a new life stage as they reach their forties and start to have families, which Mr Salt believes is likely to prompt a move out of cities in search of a backyard and larger home to suit their changing needs.
"The minimalist inner-city apartment will no longer cut it," he explained. "We're about to see five and a half million people pass from the single apartment stage into needing a lifestyle house."
This lifestyle house is likely to include a "zoom room," as millennials embrace the post-pandemic shift to working from home.
Not only will our properties likely change, our towns and cities will too, bringing opportunities for investors and developers in the commercial space. Mr Salt believes we're likely to see a change to people living, working and spending most of their time in out-of-town regional hubs. And we'll see more development of commercial and industrial facilities like fulfilment centres as more people choose to shop online.
As the property market picks up, more investors will be looking to take advantage of new opportunities, while managing potential risks. And AltX, as Mr Raphaely explained, provides a strong track record of consistent returns and a built-in contingencies to manage market corrections and worst case scenarios.
"We lead with our capital and bring investors in afterwards," he said. "Because we have our own skin in the game, we evaluate each investment very thoroughly. In the 10 years we've been in operation, we've had zero loss to investor capital. We're looking forward to continuing our excellent track record as the market picks up."
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About AltX
AltX is an alternative investment platform where wholesale investors gain access to quality curated and vetted first mortgage investment opportunities. Nationally, we are offer Private Real Estate Debt investments, delivering consistent returns between 5 - 8% pa paid monthly - with the security of 'bricks and mortar'.
AltX has been in operations since 2012 and in that time, has funded more than $3.1 billion in deals and funded more than 1,440 loans. It has more than 1,000 investors on its investment platform and has delivered 100% of capital and interest back to investors.
