Australia is witnessing a population boom that’s driving significant growth in house prices across the country. As more people migrate to major cities and key regions, the housing market is seeing increased demand, pushing property values to new heights.
This blog breaks down what’s causing this surge, how it’s impacting buyers and investors, and what steps you can take to navigate this competitive environment.
The Australian property market continues to generate a lot of interest, with each city presenting unique conditions that shape their housing sectors. Discover more here about how Australian cities are stacking up right now.
Introduction to the Population Boom and Its Impact on House Prices
Australia’s property market is experiencing dramatic shifts due to an unprecedented population boom. With a sharp increase in net overseas migration and significant interstate moves, cities like Perth and Brisbane are witnessing an explosion in demand.
As a result, house prices are rising rapidly, with limited supply only adding fuel to the fire.
Understanding these dynamics is crucial if you want to make informed property decisions in today’s market.
Why Population Growth is Driving Property Prices Up
According to recent data, Australia’s population grew by 651,214 people in 2023, driven primarily by net overseas migration, which accounted for 564,645 of that growth.
Western Australia (WA) experienced a particularly notable spike, with its population increasing by 3.3% – well above the national average of 2.5%.
The influx of new residents has put immense pressure on the housing market, especially in regions like Perth, where property is still considered relatively affordable compared to eastern capitals.
Components of Population Change by Capital City 2022 – 2023
Components of Annual Population Change
Key Cities Experiencing the Surge: Perth and Brisbane
Perth has emerged as a top performer in Australia’s property market, with house prices growing by 23.6% in the past year.
Despite this growth, the city remains affordable with a median house price of $852,240, far lower than Sydney’s $1.66 million.
The combination of affordability and high demand is making Perth an attractive destination for both buyers and investors.
Similarly, Brisbane is benefiting from increased migration and strong buyer confidence. The city has seen a 16.9% annual growth rate in property prices, supported by a thriving local economy and appealing lifestyle factors.
With demand outpacing supply, properties in both cities are being snapped up quickly.
Population Change by Capital City
The Supply-Demand Imbalance and Its Consequences
One of the key drivers of rising house prices is the imbalance between supply and demand. In Western Australia, while the population grew by nearly 94,000 people in 2023, only 17,500 new dwellings were constructed.
This shortage is creating fierce competition among buyers, leading to quicker sales and higher prices.
WA Dwelling Completion vs Population Change
Additionally, rental rates in Perth have surged by 13.2% over the past year, surpassing the national average of 8.2%.
Investors are seeing increased returns and enhanced cash flow, making the city even more attractive for property investment.
Annual Change in Rental Rates to June 2024
What Buyers and Investors Should Do in This Market
If you’re looking to buy or invest in the current market, staying informed is key. Here are some tips to help you navigate this competitive environment:
- Act Quickly: Properties in high-demand areas like Perth and Brisbane are selling fast. Be prepared to make decisions quickly to secure a good deal.
- Consider Affordability: While prices are rising, cities like Perth still offer relative affordability compared to Sydney and Melbourne. This could be a strategic entry point for investors.
- Look for Rental Opportunities: With rental prices surging, investing in properties in cities like Perth can provide strong returns. Consider the rental yield potential as part of your investment strategy.
- Be Strategic About Location: Focus on areas experiencing growth due to population influx, as these regions are likely to continue seeing property value increases.
Strategic Advice for Navigating the Market
The current population boom, combined with limited housing supply, is creating a highly competitive property market in Australia. For buyers and investors, understanding these trends and acting strategically can make all the difference. Whether you’re eyeing Perth’s growth or exploring Brisbane’s opportunities, now is the time to position yourself for success.
Ready to Explore Your Options? Reach out!
If you’re considering buying, investing, or just need some guidance in today’s market, let’s chat about how you can take advantage of these trends. Reach out to me directly at leonie@wealthology.com.au and let’s explore your options together.
