Interested in Property Investment?
If so you probably want to make sure your portfolio is successful and will grow in value.
With so many pieces to the property research puzzle, it's hard to make the right decisions to ensure a positive outcome.
It's a common belief that demographics hold the key to the future of the property market.
Population size, quality of life and location are fundamental factors shaping the future of the property market. Rather than the short term ups and downs of supply and demand, consumer sentiment or interest rates.
This means understanding Australia’s lifestyle and demographic trends will provide you with the insight you need for constructing a successful property investment portfolio.
1. Our Population is Ageing.
Our baby boomers are becoming empty nesters and as a result, their lifestyles are changing.
Many are getting ready to retire from work, downsize the family home and travel more.
Most won’t be looking at sea change or tree change, however apartment living boasting security and requiring much less maintenance, which will be attractive for many.
2. Our Population is Changing.
The average number of people living in each household is decreasing as the proportion of lone-person households, couple only and single parent plus dependent children households are on the increase.
This means there is less demand for sprawling properties with four bedrooms and more demand for smaller medium density properties.
3. Our Population is Growing.
Our current population is just over 24 million people and even though population growth is slowing, it is estimated that this will increase to 28 million by 2026 (that’s just ten years away.)
Close to four out of five of this increase – some 3.2 million people – are expected to be housed in our capitals, and mostly in Melbourne (925,000); Sydney (820,000); Perth (710,000) and Brisbane (530,000).
This means we’ll be a need to build some 1.72 million new dwellings in the next 10 years, of which 75% or 1.3 million will be in our capitals and higher density housing is easier to supply.
In fact, building approvals for high density housing are quickly catching up to detached houses in Sydney and Melbourne in particular, with Brisbane not far behind.
4. Our first home buyers are struggling.
The property market is becoming less accessible for first time home buyers.
Housing affordability, in our capital cities in particular, is among the most expensive in the world.
Many more first time home buyers are willing to compromise their housing preferences just to get into the market and many start off buying an apartment rather than a house.
Others become renting investors living (renting) where they choose (but can’t afford to buy) and buying an apartment as an investor.
5. Our preferences are changing.
Generation Y has different preferences to the generations before it.
There is an increase in the number of people wanting to live in the inner city, or close to the CBD, so they are closer to work, social life and attractions and apartments are much more convenient for their lifestyle.
These demographic trends have some important implications.
Apartment living is on its way to becoming more popular than ever; it is certainly superseding the quarter acre block as the great Australian dream.
These changes in Australia’s lifestyle preferences are indeed having a ripple effect on the economy and they also mean significant and lasting changes to the real estate market.