Why has Australian property been such a great investment over the past 25 years and why will it continue to be over the next 25 years? You only need to look at population growth both globally and in Australia to see why.
Projections of population growth established in 2017 (7 billion population) predict that the human population is likely to keep growing until 2100, reaching an estimated 8.6 billion in 2030 and 9.8 billion in 2050.
Based on current trends, Australia's population is projected to reach 30 million people between 2029 and 2033, according to the latest figures released by the Australian Bureau of Statistics. The large majority of this population growth will be around the capital cities particularly Melbourne, Sydney and Brisbane due to existing infrastructure and employment. Have a look around most capital cities on google earth. There is next to no vacant land left within 30-50km of the CBD and as the population grows vacant land will only be available further out on the urban fringe. What is now the urban fringe will be the middle ring in 25 years as the urban fringe moves out to new suburbs that don't even exist today.
One of the main reasons why Australian property has been so robust over the past 25 years is that historically half of Australia's population growth has been from migration which has greatly increased our demand for housing.
Based on CoreLogic figures below Melbourne has been the best performer with housing growing on average 8.1% over the past 25 years and units growing on average 6.6% over the same period. Most interesting is that Melbourne units have outperformed all capital city housing markets except for Sydney, Melbourne and Perth.
Australia will continue to be one of the most popular migration destinations in the world, due to its clean environment, high standard of living, employment opportunities and safety. This will be sure to underpin our population growth for the future. So what will property markets look like in another 25 years if property continues to grow at the same rate? Aussie Home Loans has put together some figures.
Figures look ridiculous to you? Well they look equally as ridiculous as the median prices 25 years ago in 1992 when we all wished we had bought more property now.
Stop thinking short term and look at the bigger picture. Plant the seeds for your future today.
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