Globalisation, Facebook & The Investment Market

Market Insights
8 years ago
3 minutes

In a world where international borders are more a facade than a ruling, many thought that foreign investment, along with many other things, would flourish and take-over.

Facebook and Twitter allow people to connect and communicate, providing a pathway, in conception, that woudl allow investors and markets to become transparent, thus providing a growing and expanding investment result.

However, and despite the occasional bubble, the global property investment market has seemingly remained on the same flat course it has for nearly a decade. 

Here, in Australia, a reported influx of asian investors, specifically targeting CBDs and affluent suburbs, has dominated the public’s suspicion. Melbourne has most recently undergone a transformation from a CBD that inhabited under 2000 people in 1991, to a city centre that is the cultural epicentre with towers of state-of-the-art apartments and offices. 

Undoubtedly, foreign investment has aided this nation’s progression - with many analysts suggesting that Asian investment aided Australia’s clever dodge and juke of the Global Financial Crisis. But what is true? Is the World, let alone Australia, part of one giant investment organism, or is the investment market far smaller, and far more elite, than many of us once thought?

The 2015 Global Investment Sentiment Report, has revealed that 10% of investors looked outside their home region for opportunities. And whilst public perception would imply a higher statistic, it could be argued that Melbourne’s foreign investment market is dominated by only a select few.

Importantly, it is without question that Asian investors are more inclined to invest outside of their home origin, with over 46% using international investment opportunities as an avenue to extend their portfolio.

Terence Tang, Managing Director of Capital Markets & Investment Services in Asia, was adamant that Asian investors were far more aggressive in their risk analysis therefore were more inclined to invest and develop overseas.

“More than half of Asian investors said that they were likely to take on more risk over the next 12 months in order to achieve superior returns,’ said Mr Tang. 

“Market liquidity remains  a concern for most Asian investors after seeing a fall in sale transaction volumes in individual markets in the past 12 months.”

And can anyone really argue with them? 

Australia and New Zealand provides a safe-haven for property investment thanks to strong economic growth, education and an ever improving global sentiment. 

Unsurprisingly, only 5% of investors possess a negative outlook on the Pacific property market, whereas the majority, over 83%, believe the outlook is indeed positive. 

2015 has seen Australia slightly edge the year prior, with a total investment of AUD $19.8 billion across all assets and platforms, compared to AUD $17.7 billion in 2014.

Is Australia in a property bubble, created and formed by its occupants, or are we finding ourselves in a point in time where Australia’s culture, openness, and stability places itself as the global leader in investment opportunities?

All arrows are pointing up.