Recent reports show that Australia’s population growth has returned to pre-pandemic levels and is expected to reach its highest rate in history in 2023. This growth is particularly evident in major cities such as Melbourne, which has now become the most populous city in the country.
As a result of this rapid population growth, the demand for housing has increased significantly. In the next financial year alone, 650,000 migrants are expected to arrive, creating even greater demand for properties and further increases in both house prices and weekly rents.
According to Domain’s quarterly rent report, “Australia’s net overseas migration gain hit almost 304,000 new people in the 12 months to September 2022, providing a significant boost of population gain for Australia. The proportion of overseas migrant arrivals that were temporary visa holders is now sitting at 61% – a substantial driver of rental demand”.
So what does this mean for property investors?
Firstly, the higher demand for housing will likely result in higher property prices, providing an excellent opportunity for investors to build equity and generate long-term wealth. In fact, in 2022, AllianceCorp achieved an average of 18% growth across the states of Victoria (11.3%), Queensland (32.2%) and Western Australia (12%) despite the national -5.2% decrease in housing values.
Secondly, the growing population has created a need for new properties, leading to an increase in property development and construction. The Australian Bureau of Statistics reported that in February building approvals for total dwellings rose 4.0%. This creates opportunities for investors to purchase new-build properties and capitalise on the demand for projects closer to major cities and regional hubs.
Thirdly, the existing demand for rental properties has already led to a whopping 13% increase on weekly rents YOY, providing a significant return for those who already have a property portfolio.
Source: Domain, March 2023 Rental ReportAccording to CoreLogic, rental yields have increased across most capital cities, with “…Perth, up 18 basis points to 4.85%, and Melbourne and Brisbane, both up 15 basis points to 3.40% and 4.34%, respectively”.
The rapidly growing Australian property market presents excellent opportunities for investors to build equity, generate long-term wealth, and maximise their returns on investment. AllianceCorp is committed to helping you take advantage of these opportunities and succeed in the property market.
So if you’re thinking about kickstarting your property investment journey and generating a passive income to give you more financial freedom, simply fill out the form below to request a no-obligation strategy session with one of our esteemed Senior Property Wealth Planners valued at $495 for FREE.