Housing, healthcare, and financial services are expected to thrive amid burgeoning demographics. Addressing the housing sector's current shortfall, the Australian Bureau of Statistics (ABS) revealed an 11.7% increase in dwelling commencements as of March. However, these figures still fall short of the government's target of constructing 1.2 million dwellings within five years, leading to historically low vacancy rates in major cities. Similarly, the healthcare industry faces rising patient loads and aged care demands, while the financial sector experiences heightened activity in mortgage origination.
Australia's approach contrasts with that of Canada, another nation welcoming high immigration, yet currently struggling with demographic and housing issues. In contrast, Datt Capital notes Australia is better leveraging immigration advantages to maintain consumer confidence and labour market stability. Furthermore, the healthcare sector is set for continued growth, with a projected compound annual growth rate (CAGR) of 4.5% from 2021 to 2028, driven by an aging population, increased demand for services, and advancements in digital infrastructure.
Looking forward, the Datt Capital Small Companies Fund is strategically positioned within these sectors. Emanuel Datt emphasises that while passive investment strategies may overlook these opportunities, there is substantial potential for earnings growth and pricing power among companies in residential development, diagnostics, mortgage servicing, and digital financial infrastructure. Investors targeting these underserved parts of the economy could see transformative returns.
