OK, let’s ignore the smoke and mirrors for a moment and take a considered look at the numbers.
ABS numbers tend to fluctuate quite a bit m/m and q/q…but over a year you tend to get a reasonable picture of what is going on.
And look at the population growth across Australia over the past 12 months – a staggering 397,400 extra heads.
So, where are they all heading?
The quick and dirty answer is: not to Tasmania (600 more people), NT (+4,100), Canberra and the ACT (+8,100) or South Australia (+15,600).
The booming states in absolute terms are Victoria (+101,900), Queensland (+92,300), New South Wales (+92,300) and Western Australia (+82,600).
When viewed on a percentage basis, WA is the clear standout, thanks to its mining construction boom:
And, the trend nationally?
It remains very, very strong.
397,400 extra persons per annum, is it any wonder Australian property prices didn’t fall dramatically during and after the global financial crisis as so many confidently but falsely predicted?
For a decade now we have been swamped with ‘Australian property bubble’ articles, which must be a little bemusing for inhabitants of Hobart, Adelaide and Brisbane, where prices have not gone anywhere for years.
Meanwhile wages have increased (thus decreasing prices in real terms) and interest rates have dropped to generational lows, improving the affordability of repayments.
Even in Sydney property prices have comfortably underperformed household incomes since the last ‘irrational peak’ in Q1,2004.
That will no doubt change through 2014 when prices boom in response to low interest rates, massive demand from Asian and domestic buyers and investors, and an undersupply of appropriate dwellings.
Melbourne dwelling prices are a somewhat different story and have absolutely boomed by well over 50% since 2006.
But the authors of these neverending property bubble articles should maybe stop to consider: are we talking about a purely speculative property bubble as is forever the implication?
Or a we to some extent talking about a country where every year we are pouring 400,000 more people into a handful of popular locations, which has prevented land prices in those locations falling to the level that people who rent where they live desire?
Taking a longer-term perspective, if we continue down the route we are presently taking, we’ll no doubt get a correction at some point, but a decade on we’ll still be having the same old discussions.
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