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How does a booming population affect the property market?

16 Apr 2013 Brian Brady 0 Comment

People Cartoon ImageRP Data has released some really interesting information about migration figures throughout Australia, and an eye-opening analysis about how migration may impact various property markets.

It seems that NSW lost over 18,000 people, mainly to QLD and WA, from September 2011 to September 2012.  While this may sound like a lot it is actually well below the average annual loss over the last decade, which sits at around 30,000 per year.  Up to 90% of NSW’s migrating population had previously headed to the warmer QLD climate; however, recently WA have muscled their way into the action and are fast catching up to QLD as the most popular destination for those moving interstate.  SA has also lost around 2,500 people, while VIC made a small gain of just under 2000.

It is largely presumed that the large number of people leaving NSW are in search of either jobs or housing – QLD has long been regarded as more affordable than NSW, while WA is renowned for having a strong jobs market.

Just as NSW may be losing those moving interstate, they do attract the most people migrating from overseas, with a net migration of 41,000 new people per year.  This is relatively low compared to Victoria’s net migration of approximately 56,000, QLD’s net migration of 57,000 and WA’s net migration of a whopping 61,500 new people each year.

So just what does this mean for our property market?

When you consider that approximately 300 plus new homes need to be constructed for every 1000 new migrants, the big beneficiaries of migration are the housing construction industries; however, with Australia’s population growing by 1000 per day over the last year, the construction industry may soon be placed under enormous pressures to meet an unprecedented demand.  The short supply and growing demand should at the very least continue to support current home prices, which will no doubt put a smile on the faces of those preparing to sell their Everton Park home.

 

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