No matter whether you are in the market for a home or an investment property, it makes financial sense to buy in an area where values are tipped to rise. But where do you look? Here we will unveil the Australian cities where population growth is tipped to turbo-charge the property market.
According to PropTrack, one of the biggest drivers of property prices right now is population growth.
Let’s look at the cities more people are expected to call home.
Is the regional renaissance over?
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 four cities over the next two decades.
Which cities are set to benefit?
PEXA is predicting a population growth of 7.4 million between now and 2041. That is a lot of people looking for a place to live. It is 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, Brisbane, and Perth.
PEXA says the four hotspot cities require vast numbers of new homes:
- 723,000 in Melbourne (that’s 40,000 new homes per year or 772 per week)
- 582,000 in Sydney
- 381,000 in Brisbane, and
- 334,000 in Perth.
Meanwhile, Adelaide is predicted to need at least another 141,000 dwellings between now and 2046.
What does this mean for property buyers?
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 four cities in the past 12 months. CoreLogic says property prices have soared 7.3% in Sydney over the past year, 5.0% in Brisbane, 8.8% in Perth and 1.5% in Melbourne (and 5.0% in Adelaide).
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 are considering buying, particularly as an investor, it could be worth looking at one of these hotspot cities, even if you don’t live there.
Are you home loan ready?
No matter where you plan to buy, understanding your borrowing power is a key starting point.
Give us a call to find out how much you can borrow and what grants and schemes you might be eligible for to help fund your next purchase.
A: The four cities predicted as upcoming real estate hot spots are Sydney, Melbourne, Brisbane, and Perth.
A: Population growth in these cities is driven by a combination of net migration to Australia and regional dwellers, especially younger people, moving to urban areas for study and work opportunities.
A: It is estimated that 2 million new homes will be required over the next 18 years, with 67% of population growth concentrated in these four cities.
A: Melbourne requires 723,000 new homes, Sydney 582,000, Brisbane 381,000, and Perth 334,000.
A: Yes, the Covid-inspired rush to regional areas is reportedly over, with a return to urban living now being observed.
A: Increased demand on this scale is expected to continue pushing up property prices unless supply increases at a similar pace.
Phone: 1300 855 022
Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.
About the Author:
Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilizes her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.
Connect with Louisa on Linkedin.
Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).
Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.
Apartment Living: a Head Start into the Real Estate Market
Your Mortgage Broker and Real Estate Agent Working Together
The Real Estate Market Soars Towards Record Highs