30 Jan What Does ‘Big Australia’ Mean for the Property Market?
‘Big Australia’ is the phrase that is commonly used to describe the anticipated boom in Australia’s population in the next fifty years or so.
When the phrase was originally coined by former Prime Minister Kevin Rudd in 2010, the prospect and desirability of a rapid, significant growth in population within one or two generations was still being debated (for instance, Rudd’s Labor successor Julia Gillard rejected the Big Australia concept).
However, there is little doubt today that the number of people living in Australia is now growing rapidly, and is set to explode even further, making Big Australia a reality.
This is supported by data released by the Australian Bureau of Statistics (ABS), which suggests that the population of the country will reach between 34.3 and 45.9 million people by 2071.
One of the key questions surrounding the issue of significant population growth is whether the infrastructure in our cities and towns will be able to keep up with the boom.
In particular, is the housing market geared up to meet the needs of the increasing number of people coming into the country, or moving from one state to another? How many new houses do we need to build? Does the country have the capacity to meet these needs?
Is the housing industry ready for Big Australia?
In August 2023, the federal government committed to building 1.2 million new homes by 2028; however, there are serious questions as to whether the housing industry is ready to meet the demand.
In order to do so, the country would need to build at a significantly faster rate than it currently is. ABS data also suggests that this will be a challenge because building new detached homes now takes longer than it did in the past.
In addition, construction costs continue to rise, making more difficult for developers to realise returns. As an example, a recent major development in Brisbane was cancelled as the developer could not engage builders who were able to complete the project at a cost that would make it viable.
More high density housing required in capital cities to meet the Big Australia boom
As Australia’s population grows, capital cities will continue to be where most Australians end up living. In 2022, 67% of the population lived in our state capitals, and this is expected to increase slightly to 68% by 2032.
However, governments, lenders and local authorities are not helping to grow the housing stock in our capitals, with not enough high density housing (i.e.. apartments and semi-detached houses) being given building approval in built-up areas.
As a consequence, while the number of people expected to live in capital cities is set to grow in line with the population growth nationwide, there is likely to be shortage of properties that will meet the demand.
This is why investors looking to the future should in our view continue to see properties in capital cities as providing the best opportunities to capitalise on a growing demand for housing that will accompany the projected population increase.
Why Brisbane presents investors with so many opportunities
As well as being the host city for the Olympic Games in 2032, there are a variety of other reasons why Brisbane looks set to provide Australian property investors with exciting opportunities both in the short- and medium-term.
For instance, Queensland’s overall population is expected to reach 6.77 million by 2032, by which time Brisbane is set to be home to 51% of the state’s population (up from 49% in 2022).
This projected growth is also being reflected by property prices in Brisbane. According to CoreLogic, there have been significant increases since January 2023 (which have continued into January 2024), and there are indications that both property values and rents will continue to rise throughout the year.
Nevertheless, Brisbane is still a more affordable place in which to invest than other capitals, with the median house value currently at 63% of that in Sydney.
Brisbane also has a strong economy and is experiencing continued growth in employment opportunities. There is also significant investment in infrastructure taking place ahead of the 2032 Olympics.
The Brisbane rental market is good news for investors
We are currently experiencing a very strong market for landlords in Brisbane, with rental yields higher than Sydney or Melbourne.
The city has widespread appeal in terms of both employment and quality of life, and as a consequence many people from other parts of Australia have moved to Queensland’s capital. This has led to a very low vacancy rate, and strong competition when quality properties come onto the market.
Talk to Power of Property about the best Brisbane investment properties
In our view, all of these factors combine to make Brisbane one of the most attractive and potentially lucrative markets for Australian property investors as Big Australia becomes a reality.
At Power of Property, we are here to you develop an investment strategy that works for you.
As experienced property strategists, we are able to access new property investment opportunities in Brisbane and south-east Queensland before they become available to other investors. In this way, you can effectively position yourself to take advantage of the expected population boom, the growing demand for housing, and the shortage of properties to meet this need.
If you want to find out more about how to get into the Brisbane property market, call Michael Lawton on 0407 785 560 or Danielle Charlton on 0411 268 795, or book an online property strategy session today.