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Exploring 4 Australian cities poised as future property hotspots

Whether you’re considering a new home or an investment property, making a wise financial choice involves selecting areas poised for value appreciation. But where should you focus your attention? Today, we’ll unveil the Australian cities where population growth is expected to provide a significant boost to the property market.

One of the primary catalysts driving current property price increases is none other than population growth, as indicated by data from PropTrack. Let’s delve into the cities where more people are projected to make their homes.

Is the regional revival coming to an end?

As the COVID-19 pandemic reached its peak, many Australians were drawn to regional areas. Notably, the population of regional Australia experienced an increase of 70,900 people during 2020-21, marking the first time in over four decades that regions surpassed capital cities in population growth. However, the surge of Australians seeking refuge in regional areas due to the pandemic appears to be subsiding.

Despite the growing trend of working from home, the reopening of borders has initiated a return to urban living. According to insights from the property exchange platform PEXA, this shift will result in two-thirds of Australia’s population growth being concentrated in four key cities over the next two decades.

Which cities are poised for growth?

PEXA’s projections indicate a significant population growth of 7.4 million people expected between now and 2041, signifying a considerable demand for housing. This influx of people searching for a place to call home is not solely attributed to net migration to Australia.

Anticipated trends suggest that regional residents, particularly the younger demographic, will gravitate toward urban centres, attracted by the array of educational and employment opportunities they offer. Consequently, there’s a compelling need for the construction of two million new homes within the next 18 years, with a remarkable 67% of population growth concentrated in Sydney, Melbourne, Brisbane, and Perth.

The statistics are nothing short of astonishing. PEXA reports that the four focal cities in this growth surge demand a substantial number of new homes:

  • Melbourne: 723,000 (equivalent to 40,000 new homes annually, or 772 per week)
  • Sydney: 582,000
  • Brisbane: 381,000
  • Perth: 334,000

Additionally, Adelaide is anticipated to require at least another 141,000 homes by 2046 to accommodate its growing population.

Implications for Property Buyers

To begin with, the surge in demand of this magnitude is expected to keep pushing up property prices unless the supply can expand at a corresponding pace. Even with higher interest rates, we have already witnessed an increase in property values in all four of these cities over the past 12 months.

According to CoreLogic, property prices have experienced significant growth, with Sydney seeing a remarkable 7.3% increase over the past year, while Brisbane observed a 5.0% rise. Perth stands out with an impressive 8.8% surge, while Melbourne recorded a relatively modest 1.5% uptick (with Adelaide at 5.0%).

If you own property in these cities, you might find that your property’s equity has grown more than you thought, with the potential for further appreciation. Or if you are thinking about a property purchase, particularly as an investor, it could be worthwhile to explore one of these thriving cities, even if you do not plan to live there yourself.

Ready for a Home Loan?

Regardless of your intended purchase location, understanding your borrowing power serves as a crucial initial step. Feel free to get in touch with us today on 1800-E-LOANS to determine your borrowing potential and explore the various grants and schemes for which you might qualify to facilitate your next property acquisition.

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Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

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