26 million people – How does it impact the property market?

Recently, Australia reached another population milestone – 25 million people – a lazy 26% increase from 18.5m in 1997. A little unfair, but we have to say it, the Australian Bureau of Statistics (ABS) got it way wrong in 1998, when they predicted an Australian population of 23.5m by 2051.

The increasing population has obviously been one of the biggest drivers of housing growth in this country. In 1997, Melbourne’s median house price was $177,500 and Darryl Kerrigan’s home was being compulsory acquired for $70,000. Fast forward 20 odd years and Melbourne’s median house price sits at over $900,000. We’ll save the heavyweight debate – Baby Boomers v Millennials – for another time.

Whilst Australian’s are still reproducing, overseas migration is still the biggest driver of population growth. And not everyone immigrating to Australia wants to live everywhere in Australia. Here is a quick snapshot of where people are moving to within Australia;

Victoria

• Melbourne isn’t Lagos in Nigeria, which nearly doubled to 14 million people, between 2000-2016; however Melbourne still continues to grow at over 2% per annum, and the ABS is predicting 2.4% growth in the next five years.
• Melbournians continue to be drawn to the lifestyle that’s on offer in Geelong, the Surf Coast & Bellarine Peninsula, with approximately 7000 people moving to Geelong from Melbourne last year
• The City of Casey already has the most residents of any municipality in Victoria and is forecasted to increase from its current population of 288,000 to 492,497 by 2041. By 2031, it’s forecasted that 8,700 people will move there each year, up from 7,300 at present.

Sydney

• Sydney and Melbourne are still the favoured destinations for foreign residents.  Sydney’s population increased by 102,000 residents in 2016-17, with 85,000 of them from overseas.
• And whilst Sydney’s population continues to increase by 2% per annum, its local population has had enough (had enough of the property prices maybe?), with many Sydneysiders moving to other areas of NSW and down to Melbourne.

Brisbane

• Whilst Brisbane hasn’t received the hundreds of thousands of people like Melbourne and Sydney, it has increased its population by 48,000 in 2016-17, to 2.4m. And the Queensland capital is forecasted to continue to grow at 1.7% per annum.
• And it seems like Australian’s are coming around to Brisbane, with 25% of the increase coming from other parts of Australia.

Whilst population growth is a big driver of housing demand, it’s not the only factor you should consider when purchasing property. It’s important to consider further macro factors like job growth and demographic data; like an ageing population, who want to live in homes with minimal stairs.  This should be overlaid with micro factors, like land content, property type, location, zoning, school zones, supply, quality, yield (if investment) and flooding to name just a few.

If all of the above seems too daunting, feel free to Get In Touch, 1Group Property Advisory would be more than happy to help.

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