Australia is the New Asia

As the world continues to shrink with globalization, international real estate investment is becoming more popular than ever before. Improved communications, reduced transactional friction and investment-friendly policies are drawing Asian investment to the U.S. market in record numbers. However, there’s also been intense activity in Australian real estate, particularly from Asian investors.

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iProperty.com conducted a survey at the end of 2015, which showed that Australia was the first choice of investment location for international property buyers based in Singapore and Malaysia, second for Indonesian investors.

Experts suggest that these investors see Australian properties as a better investment than real estate in other countries. It is often relatively cheap, given currency fluctuations. The Australian dollar has fallen by about 30% in the last few years.

Asian investors are “looking at larger towns like Newcastle and Wollongong. Larger established towns (with) universities in place and also potential for growth from a commercial side of things.”

There’s been a high level of investment from China as well. The Wall Street Journal recently reported that Chinese investment in Australian real estate has doubled in the past year. This segment accounts for 16% of the total sales of Australian real estate. In fact, China invests 3 times the amount in Australian real estate that the U.S. does, and 6 times what Singapore invests. Prior to 2013, the U.S. was the leading investor in Australian property. China is extremely important to the Australian economy. It is Australia’s largest export destination and also contributes to that country’s growing international tourism.

This is partly fueled by uncertainty surrounding the Chinese economy. Favorable trade agreements and a growing Chinese middle class also encourage the flow of investment to the Australian market. High net worth individuals in China find the Australian market attractive, both in terms of price and economic stability.

Actions by the Australian government at the end of 2015 also put a bit of a damper on foreign real estate investors. The government cracked down on property owners who had not gotten the required approval for their investments. It also instated a new fee for international investors registering their Australian properties. Rules governing newly built properties are less restrictive, and this has led to record participation from foreign investors in development projects.

The international impact is being felt mostly in the residential market, in part due to the small size of the commercial market, which is dominated by domestic investors. However, foreign money is stillgoing into commercial properties as well as development plans. Overall, in the past year, 50% of Australian real estate investment capital came from foreign investors, according toAustralia’s Foreign Investment Review Board.

I can see this high level of foreign interest will have an impact on all sectors of the Australian market. Demand is expected to grow in hotels and resorts and even in the rural land market. It’s likely that this trend in high demand will continue.

Climate Change and Poverty Go Hand in Hand

“Climate change hits the poorest the hardest, and our challenge now is to protect tens of millions of people from falling into extreme poverty because of a changing climate.”

– The World Bank Group President, Jim Yong Kim

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The changing of the world’s climate has been an important topic for the past decade. We have seen some horrific natural disasters and watched destroyed countries and cities try to recover from the results. The fact is that climate change is already preventing people from poverty.

The World Bank Group released a new report that claims there could be more than 100 million additional people in poverty by 2030. That is, unless we can rapidly develop climate-smart and emission-reduction developments. The report, “Shock Waves: Managing the Impacts of Climate Change on Poverty” will be presented at the international climate conference later this year.

Ultimately, the report discovers that poor people are already at high risk from climate-related shocks. Like what? Think about results of crop failures from reduced rainfall, spikes in food prices after these extreme weather events and increased incidences of diseases after heat waves and floods. These tough shocks wipe out hard-won gains and lead to irreversible losses that are driving people back into poverty, especially in Africa and South Asia.

The World Bank Group President, Jim Yong Kim has said, “This report sends a clear message that ending poverty will not be possible unless we take strong action to reduce the threat of climate change on poor people and dramatically reduce harmful emissions.”

The report shows information proving that the poorest people are more exposed to climate-related shocks like floods, droughts and heat waves than the average population. They lose much more of their wealth when they are hit.

Of the 52 countries that could be surveyed, 85 percent of the world’s population lives in countries where poor people are more exposed to drought than the average.

One analysis of 20 developing countries showed that collecting and redistributing energy taxes would benefit poor people despite higher energy prices, with the bottom 20 percent of the population experiencing a net $13 gain for each $100 of additional tax. Well-designed emissions-reductions programs that strengthen the productivity of agriculture and protect ecosystems could benefit 20-50 million low-income households by 2030 through payments for ecosystem services.

This report was perfectly timed to gather enough attention on how the climate affects the poor before negotiators father in Paris for the international climate talks. I hope that the find to end poverty and slow down climate change can be achieved if they are addressed together. The number of people in poverty is only going to increase and their living situations are going to become worse and worse. Let’s put actions into our development work now.