Today I’d like you to come on a journey with me and leading demographer Simon Kuestenmacher.
First, we’ll go back to the 1950s, then forward to today, and then forward again to 2054.
We’ll look at how our cities have changed and will change even more over a century as the Australian nation transitioned from a colonial outpost to a cosmopolitan global community.
We’ll delve into Simon’s latest research which tells a powerful story about our nation.
It reveals the lifestyle preferences of the Australian people and the drivers of demand for residential property, something all property investors need to understand.
What will our cities look like in the future?
There's been lots of speculation lately about how we going to live post-Covid, but I want to take a bigger picture view and look at what Australia’s largest cities may look like in 40 years.
Of course, this will be critical information for anyone interested in property investment or in business for that matter.
I'm joined in today's podcast by Simon Kuestenmacher, director of the demographics group and one of Australia’s leading demographers.
Now we’re going to look back in history to see what Australia’s biggest cities were like in 1954.
They then fast forward to today to see how things have changed and then project what’s likely to happen to Australia’s future cities in 2054.
So, let’s zip back in time to the mid-1950s.
- Sir Robert Menzies was Prime Minister, when returning diggers married their sweethearts, and when the baby boom was in full swing.
- The biggest city on the Australian continent was the behemoth Sydney with almost two million residents.
- Sydney overtook Melbourne as Australia’s largest city soon after the federation.
- Melbourne followed then Brisbane (minus Ipswich which was considered a separate city), then Adelaide which was then a burgeoning manufacturing hub.
- The second tier of Australian cities comprised Newcastle, Wollongong, and Geelong manufacturing hubs. As Australian manufacturing struggled later in the century (due to reduced tariffs) these communities would, for a time, struggle.
- Also in the top 20 were cities triggered into life by gold rushes; this included cities like Bendigo, Ballarat, and even Kalgoorlie. Kalgoorlie was the nation’s 20th largest city in 1954.
Let’s fast forward to 2021 and the Australian population has almost trebled due to large-scale migration and a relatively high birth rate reflecting young people’s confidence in Australia’s future.
- Both Sydney and Melbourne surged past five million. Melbourne begins to close the gap in Sydney.
- Brisbane absorbs Ipswich. And south of Brisbane, a strange new force coagulates a series of coastal villages into an Australian conurbation known as the Gold Coast. That force was lifestyle, retirement, and the idea of intercity commuting.
- The property and infrastructure industry responded with high rises, canal estates, new suburbs, airports, shopping centres, and other amenities.
- The Australian urban system of 2021 is driven by different geopolitical, demographic, and lifestyle megatrends that weren’t evident in 1954. No amount of future thinking could have conceived of what was to unfold and especially since 1990.
- Australians were no longer tied to agriculture as the basis of our prosperity. We found new markets, new resources, and new ways of selling our expertise.
- City jobs flourished. Knowledge workers materialized to drive the new businesses. Lifestyle cities, like the Gold Coast, surged. As did copycat cities (and smaller coastal towns) across Australia. These new lifestyles, sea-change and tree-change, and now work-from-home communities thrive within drivable distances of every capital.
What’s in the future for Australian cities? Let’s fast forward to 2054 - what will Australia’s largest cities look like then?
- Over the 33 years to 2054, the Australian population is expected to rise to 38 million which is a net extra 12 million on today’s figure. Most, say seven million, are expected to derive from overseas.
- By mid-century Melbourne is expected to regain the title it lost at federation as Australia’s largest city.
- The net extra three million added to Sydney and Melbourne will prompt large-scale planning and investment in infrastructure.
- Australia must evolve the world’s best practices in city planning, infrastructure delivery, creating affordable and adaptable housing, in building entrepreneurial skills in property and finance.
- The surprise by mid-century is the rise of the cities of Mackay and of Albury, a lifestyle treechange work-from-home city positioned centrally within the Melbourne-Sydney-Canberra nexus and with university, manufacturing, administration, and military diversity.
- Good prospects: Australia is a good prospect for property and other investments in the 21st century if we retain military support from the US. There is scope to develop locally-based industries and businesses, and we remain an immigrant nation.
- Global events: The drivers of city growth are often triggered by global events (e.g., conflict driving immigration), local policy settings (e.g., immigration), the development of new markets (e.g., the recent trade deal with India), the tapping of new resources (e.g., solar, lithium, agribusiness) and Australian ingenuity and enterprise to deliver products to market (e.g. FIFO enabled the last resources boom).
- Expect change: No single industry can support the continued rise of a city over the course of a century. There might be golden years – such as the 1950s for wool or the 1960s for manufacturing – but eventually, more powerful forces from beyond the region prevail and change the business landscape.
- Develop agility: Australian cities in the top 20 and beyond, cannot plan for every future iteration. Instead, such communities can future-proof their communities by cultivating entrepreneurship (e.g., supporting local business), skilling local workers (e.g., investing in training centres), creating a culture of resilience (e.g., building pathways to business development), by strengthening local communities (e.g., celebrating young entrepreneurs).
- Sometimes in property and in business, it’s necessary to take a long view. Look back, learn the lessons of the past and then look to the future. Whichever way this exercise is conducted I keep coming back to the logic that Australia is growing, we need accommodation, property, and infrastructure and all attendant services are therefore good businesses to be in throughout the 2020s and beyond.
Links and Resources:
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Some of our favourite quotes from the show:
“For people interested in property and for businesspeople, there are some huge opportunities if you know where the demand’s going to be and what sort of properties are going to be in continuous strong demand moving forward.” – Michael Yardney
“The government clearly needs more taxpaying people as well, rather than young people who take up the taxpayers’ dollars to go to school or older people who take up the taxpayer dollars to kick in the healthcare system.” – Michael Yardney
“We are still a small player in the big world economy.” – Michael Yardney
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