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The latest census data has changed my position on real estate [Video]

As our population continues to grow, so too does our need for more housing.

But not just any housing and not just anywhere will make a good investment property in the future

You’ve often heard me say that demographics drives our property markets.

The latest census data has changed my position on real estate, and we discuss this in the short video below:


city family urban suburb

You see… how many of us there are, how we live where we want to live and what we can afford to live in will make a bigger difference to our property markets over the next decade than the short-term ups and downs of interest rates or the vagaries of government policies.

Recently the first set of 2016 census was released and this contained some interesting surprises and more importantly some important insights for the future of our property markets.

So to help make some sense of all this information of invited one of Australia’s leading financial commentators and bestselling author Pete Wargent to share with us his analysis of the latest census data

And more importantly what does this mean for property investors.

Watch the video on this page as Pete and I discuss:

1. The biggest trends relevant to property?

  • Faster population growth
  • This has largely absorbed the feared rental oversupply
  • Population clock has been revised up to well beyond 24.5 million
  • Especially in Melbourne, which is now recording unprecedented population growth

2. Where are demographic trends strongest and weakest?

  • Mainly a Melbourne thing
  • But Sydney still strong thanks to immigration
  • And SEQ also now picking up due to internal migration
  • Some sea-changers are moving to regions, but elsewhere all relatively benign
  • Overall, it’s a capital city story

3. What about other than population growth? 
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  • Huge surge in 25-32 year olds thanks to migration programme – the “demographic tsunami” or what Bernard Salt called the “awakening of the Millennial leviathan”.
  • Huge news for housing market demand!
  • Demographics is destiny
  • We are…less religious, more Asian, higher density, more capital city dwellers, more diverse and more tolerant of each other (including same sex couples)
  • Now 24.4pc lone households, a huge increase from a fifth in 1991 to a quarter in 2011. More so women than men. We will need more compact dwellings
  • More renters (31pc up from 27pc in 1991), and more people have a mortgage, not as many homes owned outright (31pc down from 40pc in 1991)

4. Where are people coming from?

  • Younger migrants, largely from Asia, especially now China and India
  • Helping to slow the ageing of the population so this will continue
  • Asian Century, more of us born overseas, especially from Asia
  • Some important implications for how and where people will choose to live

5. What will the Census tell us about employment and incomes?

  • Inequality?
  • Weekly incomes up 15pc since 2011, ahead of inflation at 10pc
  • Two speed housing markets, struggling to get capital growth on the city fringes
  • Census also shows there’s been a big shift since 2011 towards construction of high rise dwellings, these will probably underperform too

6. Tying it all together, what does it mean for property investors? foreign investor property

  • Aim for the three big capital cities, middle ring suburbs, owner-occupier appeal
  • The big shock change has been the astonishing appeal of Melbourne as a destination both for immigrants and internal migrants
  • People that predicted a Melbourne oversupply got it completely wrong – in fact, there will be a chronic middle ring undersupply, fast rises in rents, and prices
  • Big population growth growth in the major cities is leading to traffic congestion, transport hubs and great walkability will become more important


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About

Michael is a director of Metropole Property Strategists who create wealth for their clients through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


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