Population Boom: Is the Australian Property Market Keeping Up?
If you’re keeping an eye on the property market in Australia, you might have noticed that things are heating up. With the population steadily increasing, there’s a growing demand for housing that’s putting pressure on the market.
But, is the Australian property market keeping up with this population boom? Do we have enough homes to meet the growing needs of our communities? In this article, let’s find out the state of the property market in Australia and explore whether it’s ready to handle the challenges of a population boom. Read on.
How Does Population Growth Impact the Demand for Property in Australia?
As of September 30, 2022, Australia’s population has reached 26,124,814 people. In that quarter alone, the country has grown by 128,670 people, which is a 0.5% increase. During the year 2022, the population has grown by 418,500 people, which is a 1.6% increase. This growth is due to both natural increase (114,800 births minus deaths) and net overseas migration (303,700 migration arrivals minus departures).
It’s no secret that Australia’s population is growing at a steady pace, and with more people come more demands for housing. In fact, the demand for properties has been on the rise in recent years, and this is partly due to population growth. This puts pressure on the property market, which is felt in many ways, including rising prices and a shortage of available homes in some areas.
When there are more people looking for properties than there are properties available, the competition can be fierce, and buyers may end up paying more than they initially planned for their dream home. This is where we see the basic principles of supply and demand come into play — when the demand for properties is high, and the supply is low, prices can skyrocket.
The impact of population growth on property prices is particularly evident in areas with high population density, like major cities. As more people flock to these areas, the demand for housing increases, and this can lead to a significant increase in property prices. However, it’s worth noting that not all areas are affected equally, and there are many factors that can impact property prices, such as economic conditions, interest rates and government policies.
If you’re in the market for a property, it’s important to understand the current state of the property market and the potential impact of population growth on housing supply and prices. It’s always a good idea to do your research and seek professional advice to help you make informed decisions about buying or selling property in Australia.
The Link Between Population Growth and the Availability of Homes in the Market
In 2021, there were almost 9.8 million households in Australia. Of these households, around 67% or 6.2 million were homeowners, 31% or 2.9 million were renters, and 2.1% or 192, 200 were in other tenures, which include those who don’t own a home with or without a mortgage, or rent a home. Notably, the home ownership rate has gone down from 70% in 2006 to 67% in 2021, according to the Census data.
First off, it’s worth noting that the current state of the Australian property market is tight. In many areas, we’re seeing rising property prices and a shortage of available properties. This is largely due to a combination of factors, such as low-interest rates, government incentives and population growth.
As mentioned earlier, population growth can exacerbate these trends by increasing demand for housing. When there are more people looking for properties than there are properties available, the competition can be fierce, and housing supply shortages can become even more severe.
One of the key ways population growth affects housing supply in Australia is by putting pressure on property developers to build more properties. While developers are working hard to keep up with demand, it can take time to build new homes, and this can lead to housing shortages in the short term.
In the latest release of building activity in Australia for December 2022, the number of new homes being built has decreased. Specifically, there was a 6.7% drop in the total number of new homes being built, which is equal to 41,374 dwellings.
When we look at private sector house commencements (that’s when an individual or company starts building a new home for private ownership), there was a 2.3% decrease, with 28,330 dwellings being started. And for private sector other residential commencements (which includes things like apartments and townhouses), there was a more significant drop of 16.5%, with only 12,053 new dwellings being started.
So, what does this mean for buyers and sellers in the Australian property market? Well, for buyers, it’s better to be aware of the current market trends and understand that competition for available properties can be fierce. You may need to act fast and be willing to pay a premium to secure the home of your dreams.
For sellers, rising property prices can be great news, but keep in mind that market conditions can change quickly. Consider seeking professional advice and be aware of the potential impact of population growth on the housing market in your area.
Find Your Dream Home Today With Hill & Viteri Property
Australia’s population growth is putting a strain on the property market, with demand outpacing supply. This has led to rising property prices, especially in popular areas, and a rental crisis for many Australians. While the government is taking steps to address the issue, such as increasing housing supply and improving infrastructure, it remains to be seen if these measures will be enough to keep up with population growth.
As property experts at Hill & Viteri Property, we understand the challenges faced by property buyers, sellers and investors in the current market. We can provide expert advice and assistance to help you navigate through the changing property landscape. With our wealth of experience in the industry and deep knowledge of the local market, we can help you make informed decisions and achieve your property goals.
Contact us today to learn more.