One of the biggest drivers of property price rises right now is … drumroll … population growth, according to PropTrack.
Let’s take a look at the cities more people are expected to call home.
During the height of the COVID-19 pandemic, Australians were flocking to regional areas.
The population of regional Australia grew by 70,900 people during 2020-21 – the first time in over 40 years that the regions outpaced capital cities.
However, the COVID-inspired rush to the regions is reportedly over.
Despite the new work-from-home trend, the reopening of borders is seeing a return to urban living.
According to property exchange platform PEXA, this will see two-thirds of Australia’s population growth concentrated in five cities over the next two decades.
PEXA is predicting population growth of 7.4 million between now and 2041.
That’s a lot of people looking for a place to live.
It’s not just about net migration to Australia, either.
Regional dwellers, especially younger people, are expected to head to urban areas, attracted by the availability of study and work opportunities.
The upshot is that two million new homes will be required over the next 18 years, and 67% of population growth will be concentrated in Sydney, Melbourne, Adelaide, Brisbane and Perth.
The stats are astonishing.
PEXA says the four hotspot cities require vast numbers of new homes:
– 723,000 in Melbourne
– 582,000 in Sydney;
– 381,000 in Brisbane;
– 334,000 in Perth;
Adelaide meanwhile is predicted to need at least another 141,000 dwellings between now and 2046.
For starters, increased demand on this scale is expected to continue to push up property prices unless supply can increase at a similar pace.
Despite higher interest rates, already we have seen values rise in all of these four cities over the past 12 months.
CoreLogic says property prices have soared 7.3% in Sydney over the past year, 5.0% in Adelaide, 5.0% in Brisbane, a whopping 8.8% in Perth, and a comparatively modest 1.5% in Melbourne.
So if you own property in these cities, you could be sitting on more equity than you realise – with potentially more to come.
Or, if you’re considering buying, particularly as an investor, it could be worth looking at one of these hotspot cities – even if you don’t live there yourself.
No matter where you plan to buy, understanding your borrowing power is a key starting point.
Give us a call today to find out how much you can borrow and what grants and schemes you might be eligible for to help fund your next purchase.
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