Population Growth is a hot topic right now with Affordability following close behind. There is a reason for this of course. The more people we have the more demand there is for housing. Competition for the available housing creates a demand that drives up prices. This price increase will occur whether Owner Occupiers or Investors buy property.
The stronger the demand the worse the affordability issue will become.
Obviously there are benefits from a growing population apart from the demand for housing. These people also require retail goods and business services. All of this is good for the economy.
Melbourne is seeing some impressive growth at the moment. Over the last twelve months there has been an increase of 2.1% in our population. That’s more than every other state in Australia.
Interestingly, the population growth in the outer areas of Melbourne has been strong:
|Number of new residents|
|Craigieburn – Mickleham||VIC||2764|
|Source Australian Bureau of statistics|
June 2014 and June 2015
This is good news for our clients as we identified these suburbs as part of our Value Criteria tool some time ago. By following the income demographics, combined with known criteria for Bank Lending we can confidently use the data to find value.
Developers continue to announce new land releases throughout these areas and those prices continue to climb. Each new release becomes part of the broader picture in each suburb and higher asking prices reflect the increased level of demand.
It seems that the preference of Australians for House and Land is alive and well. Considering the predictions of an oversupply of apartments in the inner city, no such situation appears likely for the outer suburbs.
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