Transparency Boosts Australia's Position in JLL Global Index

Published : 29 July 2016

Australian commercial property achieved record foreign investment in 2015, with offshore investors accounting for 42% of total transaction volumes. This is around double the 10-year annual average.

What's more, Australia is ranked Number 2 in the world for real estate market transparency, according to the recently released JLL Global Real Estate Transparency Index 2016.

This represents an improvement from the No. 3 ranking recorded in the 2014 survey. Australia continues to hold the top spot as Asia Pacific's most transparent real estate market, while New Zealand ranks No. 2 in the region.

The Index, compiled every two years, measures transparency by looking at factors such as market data availability, governance, transaction processes, property rights, and the regulatory and legal environment.

According to JLL's Head of Australasian Research, Dr David Rees, as capital allocations to real estate grow, investors are demanding further improvements in transparency.

"Technology is allowing a more forensic assessment of real estate market patterns, allowing for greater analysis of transparency levels across markets while the rapid growth of cross-border investment means that investors place a big premium on accurate and timely information," he said.

"The thirst for market data applies across all real estate market sectors, but especially in residential markets where investors often have less access to data and rely on information in the public domain to support their decisions.

"Evidence over the number of years from the JLL Transparency Index points to a correlation between market transparency and investment volumes. Governments also are recognizing the linkage, as reflected in the steady improvement in market transparency over the 12 years since the Index was lunched. A number of initiatives are in place to improve market transparency, and the JLL report notes progress in Taiwan, South Korea, Indonesia and Japan within the Asia Pacific region.

"Transparency is very high in Australia for a numbers of reasons.  In comparison with many markets in the region, Australia also has a strong legal framework to define and protect property rights and an open and established bidding process.

"The market has a long history of transactional and time series data/information across all the major metrics, data is easily accessible to most participants. In addition, governance and the regulatory environment are high by international standards. Improvements in the coverage of alternative property sectors, such as student housing, contributed to the improvement in Australia's ranking in this year's survey."

"These factors have clearly contributed to the record foreign investment recorded in Australian commercial property in 2015. Additionally, Australia offers non-Asian investors a convenient gateway into Asia Pacific and the fast growing SE Asian economies."