Our population is growing, as does the need for more housing. Demographics drives our property markets and not all housing or locations can make a good investment property in the next decade or so. While interest rates and government policies may make a difference to our property markets, the number of people, their way of living and financial capabilities will impact our property markets in the long run.
The 2016 Census provides some insights for our property markets’ future. Government and businesses use these figures to plan and allocate their resources. The Census helps us understand the types of properties that will be in strong demand in the future.
Last year’s annual population growth was the fastest in about three years. The strongest population growth was in Victoria (2.40%), followed by ACT at 1.71%, NSW at 1.52% and Queensland at 1.46%. About 209,000 people migrated to Australia in 2016 and it is the biggest gain in three years. There were also 311,000 babies born last year.
Based on the latest Census, migration accounts for about 55% of the country’s population growth with around 1,000,000 overseas-born residents from 2011 to 2016. Australia remains to be one of the top destinations in the world for migrants.
There was also a surge of 25-32 year old migrants, which slowed down the aging of our population. It means more people are in the household formation stage. These young migrants are determined to succeed and may choose to live close to their work in the CBD, instead of the outer suburbs. NSW accounts for 40.6% of overseas migration, followed by Victoria at 35.4% and Queensland at 11.0%.
The Census also showed that more and more are living in townhouses and only 14% live in apartments, which is the same as 10 years ago despite the surge of apartment construction. A majority of 71% live in houses. In Sydney, the housing stock was separate houses. If the trend continues, more than 50% of Sydney’s housing stock will likely be apartments in 10 years. The average household size has slightly increased as well. More people living in smaller houses could be due to the lack of housing affordability.
The Census is all about the capital cities. Over two thirds of Australians live in capital cities and eight out of 10 of these live in NSW, VIC, QLD and the ACT. The population growth is underpinning Sydney and Melbourne. It’s also the reason why the predicted oversupply does not concern some experts.
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