Population Growth Driving Strong Housing Demand

Population Growth Driving Strong Housing Demand

Continued strong population growth will drive demand for housing, infrastructure and social assets such as schools and hospitals in east-coast markets, a leading property industry economist says.

In his latest analysis, Turner & Townsend senior economist Gary Emmett said demand across eastern states for housing, retail, infrastructure and social assets would be underpinned by continued high-levels of population growth “Queensland’s population growth has slowed down, but is starting to increase again in 2017 driven by interstate migration.”

Having dropped back in recent years following the mining boom, Queensland’s population rose again by 1.4 percent or 74,452. Queensland, is starting to benefit from net interstate migration amid the relative affordability of its homes. With a median house value ($515,000) which is half that of Sydney ($1.020 million), Brisbane was fast emerging as a prospect for baby boomers who are approaching retirement and baby boomers who are priced out of the market in Sydney.

This will be further helped by a recovery in employment growth, whereby job gains of 96,300 over the past year will further encourage migrants to Queensland.

Australia’s powering population growth is 30 years ahead of predictions.

In 1998, when the population was just 18.5 million, the Australian Bureau of Statistics forecast the number of people would reach 24.9 million by 2051 — but we will hit that by the middle of next year. The rise is more than 2.5 times that anticipated and, at current rates, there will be 38 million Aussies by the middle of this century.

“If we’re wondering why our cities are groaning with insufficient infrastructure, it’s because the planners have been going off the wrong numbers,” social researcher Mark McCrindle said.

“Australia’s population growth is now one of the highest in the developed world. We have added 390,000 people in the last 12 months.”

The incredible growth is the result of a “triple whammy’’ of factors — rising fertility rates, increasing longevity and, especially, massive immigration. Average life expectancy was forecast to reach 82 for men and 86 for women by 2051. But it is already at 81 and 85 and will reach the predicted levels decades early.

“But the major factor that has blown out previous population modelling has been the rise and rise of Australia’s net overseas migration,” Mr McCrindle said.

In 1998, the ABS believed the net arrivals from other countries would be between 70,000 and 90,000 per year. But 231,900 migrants came in the past 12 months.

Mr McCrindle said Queensland had the additional effect of strong interstate migration over many years as southerners headed to the Sunshine State. Queensland’s population will tip over 5 million by mid next year and the 2051 prediction of 5.9 million will be achieved 21 years early on current trends. Mr McCrindle said Queensland had the additional effect of strong interstate migration over many years as southerners headed to the Sunshine State.

Queensland’s population will tip over five million by mid next year and the 2051 prediction of 5.9 million will be achieved 21 years early on current trends. Queensland was a leader, with many more centres outside the capital city. “Queensland has 11 of the top 30 cities, compared to five in New South Wales and six in Victoria.’’

Good news is building in Queensland, according to Deloitte

Good news is building in Queensland, according to the latest Deloitte Access Economics Business Outlook report. The report, released on Monday, said China's never-say-die construction sector had showered blessings on Queensland, Western Australia and the Northern Territory. In the Sunshine State, the big fall in project construction had stopped, Sydney housing prices were sending refugees north of the Tweed, gas output was set to soar and tourist numbers were good despite a rising Australian dollar.

There were reasonable gains in engineering activity in Queensland, and Cross River Rail was in the planning stages.

Housing construction had been supporting the state's growth while mining construction was falling, but now housing construction was also increasingly fading as a source of growth, with the wobbles already starting to hit inner-city apartments.

Queensland was "beaten up" by the end of the mining boom but was starting to see some rays of sunshine from stronger commodity prices, improving population and job news, Deloitte reported.

Job growth was accelerating in Queensland and while population growth had "bottomed a while back", it had now rejoined New South Wales to be in line with the national average - although it remained below the level experienced in the state five years ago.

The Deloitte report predicted the state's economy would grow by 3.4 per cent in 2017-18, up from 3.1 per cent in its June publication.

Treasurer Curtis Pitt seized on the Deloitte report and said it was proof of the government's achievements in job creation.

"Deloitte Access Economics is very optimistic about Queensland's prospects," Mr Pitt said.

"That's confirmed by the fact the very positive DAE report follows the latest ABS figures showing our trend unemployment rate dropping to 5.9 per cent and 122,500 net new jobs being created since the state election."

So . . . with:

Population growth underpinning housing demand and Queensland being at the forefront of this growth what better time, to securely plan for your financial future, by safely invest in residential property, with the experts for 23+ years now!

Have a great weekend and catch you next week!

Troy Gunasekera

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