Australia's housing revolution continues, but for how much longer?

Sam Ferraro

Global Founders Funds Management

The revolution in Australian housing reflects a shift towards higher density dwellings.  Building approvals for high density dwellings now accounts for half of residential approvals, well above the historical norm of around one-third. 
Evidente believes that Australia's housing revolution is here to stay.  Australia's urban population density is still amongst the lowest in the world, consumer tastes continue to evolve towards more affordable, apartment living, and there are simply physical limits to the urban sprawl in Australia's major cities.
I identify two stocks that are leveraged to the prospect of strong growth in transport infrastructure designed to ease traffic congestion associated with higher density living, particularly in inner city areas.  Around this new normal however, booms and busts are inevitable, particularly a growing risk of over-supply of apartments emerging in inner city Brisbane and Melbourne.  Bank exposures here are limited such that apartment prices would need to drop by more than 25% for banks to experience material losses. (VIEW LINK)

Sam Ferraro
Senior Portfolio Manager
Global Founders Funds Management

Managing Director of Global Founders Funds Management, Sam has over 20 years experience in financial markets, with Merrill Lynch, JBWere and Goldman Sachs.

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