Whenever you see headlines about unprecedented population growth, sit up and pay attention. While it’s normal to see fluctuation in numbers over time, every now and again a certain set of circumstances will set up the perfect storm for a massive population boost.
And when that happens, you don’t want to be twiddling your thumbs or sitting on the fence. What you want is front row seats to the action: your strategy in place and your free time spent analysing data to see just where this influx of people will live, and what they’ll want to live in.
Population growth is one of four key drivers for the property market.
Whether it’s a baby boom, intrastate migration, interstate migration or international migration, any substantial increase in population will put pressure on housing.
Increased demand
At the most basic level, a growing population means more people seeking housing, which creates increased demand for residential properties. This heightened demand can lead to higher property prices and rental rates, which potentially translates to increased profits for developers.
Reduced risk
If you develop in regions with strong population growth, you’re more likely to find buyers or tenants for the properties you sub-divide or build, which means you’ll reduce the risk of getting stuck with unsold or vacant dwellings.
Lower levels of risk can also be beneficial in attracting interest from money or joint venture partners and make it easier to secure financing for projects.
A more robust economy
Strong population growth contributes to economic activity, job creation and increased consumer spending which all add to a region’s economic health. Businesses and residents are attracted to areas that appear to be thriving, driving further demand for real estate.
To accommodate a growing population, governments often invest in infrastructure projects such as transportation, schools, and healthcare facilities. These amenities can further lift the overall appeal of an area, making it more attractive for property development.
So how do I find out about population growth?
First you need to work out exactly what the government is forecasting, then use the other key drivers – government incentives, supply and demand and purchasing power – to uncover where the property market is headed.
The figures
Every year, the government’s Centre for Population publishes the population growth rate in time for the Federal Budget papers. While these figures don’t reveal exactly who’s coming, they will show projections for the year ahead, and a forecast for a further 10 years. You can compare the figures with data from previous years to get a feel for the scale of growth.
Next you’ll want to get a handle on supply in your target market.
The Australian Bureau of Statistics (ABS) publishes building approvals data – this data reflects developments that have been approved, rather than buildings completed, so it serves as a measure of potential (but not actual) supply in the market.
To understand actual supply, have a look at construction commencements to see what’s in progress to be delivered.
To identify growth potential in specific areas, developers can analyse where the state government is investing in infrastructure and use tools like National Property Data to understand the demographics of the neighbourhood.
The demographics
Demographics give us valuable insights into who lives where and what a growing population might be looking for.
By looking at factors such as the average age, number of children and their ages, employment types, marital status, and whether residents are owner-occupiers or investors, developers can tailor their offerings to meet the needs of new residents.
It’s also good for developers to have an understanding of the preferences and requirements of specific cultural groups. Birds of a feather flock together, so you’ll find people will head to particular areas looking to live among their tribe.
So if an area has a top-rated primary school, you’ll get an influx of young families typically looking for three-bedroom-plus properties. If an area has traditionally attracted a particular ethnic group where multi-generational living is common, you’ll get extended families looking for larger, dual-living homes. If an area has amenities designed for cashed-up empty-nesters, you’ll get downsizers in droves wanting low-maintenance, high-end accommodation.
The development
Understanding the needs of the target demographic is essential for developing the right product. Developers need to balance the specifications, delivering a nicer spec for owner-occupiers and a more robust spec for the investor market.
If you’re planning to develop in a very budget-conscious market, it’s crucial not to over-capitalise on the property.
On the other hand, if you’re developing at the top end of the market, you want a product that meets buyer expectations for size, outlook, fixtures and finishes.
Once you've drilled down into population growth and demographics, you can take that information to local real estate agents and see if it marries up with what they're hearing from buyers in the market.
Sometimes, when all the stars align, the potential for demand can be so high it’s not funny.
With massive population growth comes massive opportunity for property developers to deliver property for new arrivals.
And when that happens, you don’t want to be twiddling your thumbs or sitting on the fence. What you want is front row seats to the action: your strategy in place and your free time spent analysing data to see just where this influx of people will live, and what they’ll want to live in.
Population growth is one of four key drivers for the property market.
Whether it’s a baby boom, intrastate migration, interstate migration or international migration, any substantial increase in population will put pressure on housing.
Increased demand
At the most basic level, a growing population means more people seeking housing, which creates increased demand for residential properties. This heightened demand can lead to higher property prices and rental rates, which potentially translates to increased profits for developers.
Reduced risk
If you develop in regions with strong population growth, you’re more likely to find buyers or tenants for the properties you sub-divide or build, which means you’ll reduce the risk of getting stuck with unsold or vacant dwellings.
Lower levels of risk can also be beneficial in attracting interest from money or joint venture partners and make it easier to secure financing for projects.
A more robust economy
Strong population growth contributes to economic activity, job creation and increased consumer spending which all add to a region’s economic health. Businesses and residents are attracted to areas that appear to be thriving, driving further demand for real estate.
To accommodate a growing population, governments often invest in infrastructure projects such as transportation, schools, and healthcare facilities. These amenities can further lift the overall appeal of an area, making it more attractive for property development.
So how do I find out about population growth?
First you need to work out exactly what the government is forecasting, then use the other key drivers – government incentives, supply and demand and purchasing power – to uncover where the property market is headed.
The figures
Every year, the government’s Centre for Population publishes the population growth rate in time for the Federal Budget papers. While these figures don’t reveal exactly who’s coming, they will show projections for the year ahead, and a forecast for a further 10 years. You can compare the figures with data from previous years to get a feel for the scale of growth.
Next you’ll want to get a handle on supply in your target market.
The Australian Bureau of Statistics (ABS) publishes building approvals data – this data reflects developments that have been approved, rather than buildings completed, so it serves as a measure of potential (but not actual) supply in the market.
To understand actual supply, have a look at construction commencements to see what’s in progress to be delivered.
To identify growth potential in specific areas, developers can analyse where the state government is investing in infrastructure and use tools like National Property Data to understand the demographics of the neighbourhood.
The demographics
Demographics give us valuable insights into who lives where and what a growing population might be looking for.
By looking at factors such as the average age, number of children and their ages, employment types, marital status, and whether residents are owner-occupiers or investors, developers can tailor their offerings to meet the needs of new residents.
It’s also good for developers to have an understanding of the preferences and requirements of specific cultural groups. Birds of a feather flock together, so you’ll find people will head to particular areas looking to live among their tribe.
So if an area has a top-rated primary school, you’ll get an influx of young families typically looking for three-bedroom-plus properties. If an area has traditionally attracted a particular ethnic group where multi-generational living is common, you’ll get extended families looking for larger, dual-living homes. If an area has amenities designed for cashed-up empty-nesters, you’ll get downsizers in droves wanting low-maintenance, high-end accommodation.
The development
Understanding the needs of the target demographic is essential for developing the right product. Developers need to balance the specifications, delivering a nicer spec for owner-occupiers and a more robust spec for the investor market.
If you’re planning to develop in a very budget-conscious market, it’s crucial not to over-capitalise on the property.
On the other hand, if you’re developing at the top end of the market, you want a product that meets buyer expectations for size, outlook, fixtures and finishes.
Once you've drilled down into population growth and demographics, you can take that information to local real estate agents and see if it marries up with what they're hearing from buyers in the market.
Sometimes, when all the stars align, the potential for demand can be so high it’s not funny.
With massive population growth comes massive opportunity for property developers to deliver property for new arrivals.
