The Asian Century provides unprecedented opportunities for regional Australian property

With property acquisition and disposal costs being what they are, investing in property needs to be undertaken with a mid- to long-term focus. So, with large-scale urbanisation unfolding across many Asian countries, it is essential for a property analyst to look at how the resultant structural changes to world economies might impact Australian property markets over the mid- to long term too.

The rise and rise of Asia has kept me keenly interested over the past few years. Asia’s urbanisation and rising middle class are generating demand for natural resources and presenting economic opportunities on a scale not seen since the Industrial Revolution.

Where Australia sits as these globally significant megatrends play out is the subject of the federal government’s white paper Australia in the Asian Century, due out within weeks.

We expect the white paper will outline opportunities and possible roles for Australia in what is known as the ‘Asian Century’ — the current 100-year period in which great economic, political and strategic change in Asia (encompassing China, India, the key ASEAN countries, Japan and the Republic of Korea) is underway. (Although given we’re a good 12 years in and we haven’t yet seen, let alone begun planning and implementing, the contents of this white paper, it’s fortunate for the federal government that it is a century of opportunity or we’d be missing the boat entirely.)

You need to be a visionary to invest successfully, so documents such as this white paper interest me. Government policy changes and business decisions will have an impact on industry sectors, employment opportunities, and demand for that essential commodity we property investors love: accommodation.

This white paper will outline opportunities resulting from stronger ties with the Red Dragon (China) and other emerging countries, such as India, South Korea and Vietnam. So you could say, the opportunity is in the "red" and the detail is in the "white". Bring it on!

Asia is on a mission to replace the simple lifestyles of its villages with the creature comforts of modern cities, which the Western world has taken for granted for generations. As this evolves, dozens of new cities the size of our own capitals will be built and Asia’s middle class is forecast to grow from 0.5 billion (in 2009) to 1.5 billion by 2020. To put this in to perspective, Australia’s total population is 0.02 billion.

The opportunities for Australia should already be obvious. Australia has what Asia wants: energy resources, commodities for construction and manufacturing, agricultural products, education facilities, and quality tourism locations. But it’s not just one-way traffic.

Asia has something Australia is short on: capital. With federal and state budgets increasingly under pressure and funding difficult to secure generally, there is scope for Australian-based private investors to partner with Asian companies to secure the funds they need to get major infrastructure projects off the ground, thus creating enormous economic and employment opportunities and improving facilities, which would otherwise have taken decades.

To this end, Australia must relax its foreign investment policy to encourage joint ventures. Because 50% of something is much more than 100% of nothing!

If all levels of Australia’s governments are smart, they will use this once-in-a-lifetime opportunity to score two wins: decentralise our population away from the capital cities where there’s an unsustainably high concentration of people, and add economic diversity to specific regional communities. With some lateral thinking and an eye for the future, governments could create unprecedented opportunities out of the Asian Century.