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The benefits of Population Growth

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:

Suburb

State

Number of new residents
Cranbourne East VIC 4589
South Morang VIC 4164
Epping VIC 3316
Point Cook VIC 3231
Craigieburn – Mickleham VIC 2764
Truganina VIC 2572
Melbourne VIC 2565
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.

To find out how your portfolio is tracking book in a Portfolio review session at invest@investorsdirect.com.au and download our latest brochure to find out how we can assist you in building a property investment roadmap.

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Investors Direct Financial Group

Investors Direct Financial Group (IDFG) was established in 2001.
Our mission is to help our clients achieve and maintain their financial freedom.

Members of the IDFG Group include:
  • Nanmon Financial Services Pty Ltd, trading as Investors Direct Financial Group (ABN: 52 097 697 820 ; ACL: 402950)
  • ID Property Advisory Pty Ltd (ABN: 69 141 716 412 ; Real Estate Licence: 071792L)
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  • 8 Star Homes Pty Ltd (ABN: 83 135 066 876)
  • Investors Direct Financial Services Pty Ltd ACN 608 410 591
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