POPULATION GROWTH HAS NEVER BEEN

THIS HIGH

As the world economy recovers, Australia is seeing a population

boom that continues to put pressure on housing

Population expansion is a fundamental key to the property market as it brings on more 

demand for housing. According to the ABS, Australia’s population expansion has hit a new 

record with an increase of 439,000 new residents over the year to March 2009. To provide 

a little perspective, in real numbers Australia’s population growth has never been this

high. The higher the population growth, the more homes need to be built to accomodate

the increase. In percentage terms, the population growth has not been at this level

since the baby boom. Unfortunately, there is a major difference between housing demand

and housing supply; to put it in simple terms there is simply far too few new homes

and units being constructed to provide accomodation for our growing population.

Rental markets around the country have shown large increases in rental rates over the

last three years. However, over the last three months rental rates have peaked and in

some areas have fallen. Rental rates will most likely start to increase again due to a

shortage of rental housing and a pull back of first home buyer demand coupled with

record levels of population growth. With vacancy rates remaining at historic lows across

the capital cities, any relieif for renters is likely to be short-lived. 

Demand for rental accomodation has temporarily eased as many renters have taken 

advantage of the improvement in housing affordability brought about by both low interest

rates and the boost to the First Home Buyers Grant. Locally there are still very few homes

for rent and the rent being asked is still increasing in the regional areas. Sales are still

going strong with anything hitting the market going under offer very quickly. Many agents

are experiencing a great shortage of stock to sell. Some agents have even closed their

doors due to a lack of property to sell. If an agency depends on sales alone, they could

end up in trouble.