For those who didn’t receive the memo, Australia is in the midst of a tourism boom. Propertyology flagged the beneficial impact that the tourism sector would have on property markets back in 2012.
Wherever there is an increase in jobs there’s an increase in demand for shelter. Property economics!
Tourism is one of Australia’s biggest employers. From hospitality workers at restaurants, cafes, and hotels, to roles related to transport logistics such as airports and taxi drivers, and positions at major attractions like theme parks, theatres and sporting events.
Sydney, Melbourne, Hobart, Wollongong, Byron Bay and other popular tourism destinations are recent beneficiaries of solid property price growth. Others will follow. Our buyer’s agents are currently very active in some of these markets right now.
An important piston in Australia’s economic engine
According to Tourism Australia, about 600,000 jobs are directly held within the tourism sector, which in turn generated about $136 billion in revenue in 2017. That’s some serious coin running through our cash registers!
The New South Wales tourism industry employs more than 170,000 people directly and recorded revenue of $40.5 billion in 2016/17 (up 5.4 per cent on the previous year). In Victoria, about 143,000 people are employed in tourism-related jobs, which generated about $31.2 billion (growth of 8.8 per cent).
All the way along the Queensland coast, the Sunshine State has arguably the most tourist attractions however, growth in tourism expenditure of 3.2 per cent last year was below the national average of 5.3 per cent.
Australia’s biggest increase in tourism expenditure in 2017 was in Tasmania (up 20 per cent). Tourism played an important role in the overall turnaround in Tasmania’s economy from a post-GFC recession to now being one of the best performed economies in Australia. Back in 2014, Propertyology forecast the future job creation, interstate migration, and improved confidence in Hobart and commenced buying investment properties for our investor clients. We’ve since turned our attention to investing in other exciting parts of Australia while enjoying the Hobart capital appreciation that, for some of us, has already exceeded 50 per cent and is still rising.
The Asian Century Opportunity
Australia has long been a dream location for international visitors – and that dream is becoming a reality for millions more holidaymakers every year. Currently, about 27 per cent of visitations by tourists are from overseas but that figure is growing fast, especially from Asia.
The number of international visitors through our airports increased 6.5 per cent in the 2016/17 financial year – including a staggering 23 per cent rise into regional locations across the country.
As I’ve written about before, the Asian Century is real, it’s already been directly linked to some strong property market performances, and the future opportunities for property investors are very excitement exciting.
Asia’s middle class – particularly in China – is expected to grow by an extraordinary 2.5 billion people by 2030 and they’re expected to spend some of their newfound wealth on overseas travel.
According to data, there were about seven million new tourism jobs created across the Globe in 2017, which was actually one in every five new jobs created in the world. The sector grew by 50 per cent more than the world’s economy generally, and that figure is just the tip of the tourism iceberg if you ask me.
Of course, Australia is perfectly placed geographically to make the most of this. We’re also seen as a safe destination, plus we’re an English-speaking nation.
Australia has an enormous diversity of attractions. The world marvels at our beaches, koalas, Sydney Harbour, kangaroos, Great Barrier Reef, our convict heritage, beautiful rural experiences, aboriginal culture, rainforests, Dubbo’s wild safari zoo, Tassie’s scenery, wineries, food and booze experiences, sporting events, the list goes on.
The tourism boom is just beginning
While the property market performance of big cities like Perth (10 per cent growth across the 5-years ending December 2017) and Brisbane (20 per cent) resemble the largely underwhelming Australian property market post-GFC, tourism is noticeably in common with the best-performed property markets:
Change in median house price (2013-2017)[table “” not found /]
We are only 18 years in to the Asian Century. That fast-rising middle class that I referred to earlier is only just starting to grow wings.
International tourists are increasingly keen to explore more of Australia’s diverse attractions. Growth in passenger volumes is 2-4 times the national average in various regional airports including Cairns, Dubbo, Armidale, Ballina, the Sunshine Coast and Launceston.
Acknowledging the enormous opportunity, Tourism Australia has flagged a long list of tourism infrastructure projects. The pipeline is estimated to be worth $37.8 billion across more than 200 projects in aviation, arts and recreation, and accommodation.
It would be irresponsible not to mention that tourism, as with every industry, can be adversely impacted by unforeseen events which result in a downturn.
Risks can include a high Aussie dollar, oil prices, airline strikes, political instability, and even terrorism attacks. Relative to other parts of the world, Australia’s industry risk is generally regarded as low.
Propertyology is Brisbane-based buyer’s agency and national property market research firm. Testament to our multi-award-winning success is Propertyology’s expertise in being the only company in Australia to forecast Hobart’s remarkable resurgence and help people invest there from mid-2014 to 2016, before the boom. Now, while others fight like seagulls over a chip to get in to that market, our buyer’s agents are actively investing in a few other locations that resemble what Hobart looked like in 2014. Like to know more? Contact us here.