STATISTICS ON MEDIAN PRICES, MEDIAN RENTS AND POPULATION PROJECTIONS ACROSS AUSTRALIA

Recently I carried out some specific research and found some very interesting results which I would like to share with you. Firstly I wanted to see how property values and rents are linked to supply and demand in each state. Generally speaking, when you have a greater demand than supply for a product it tends to put an upward pressure on the price of the product therefore increasing its value.

Let's have a look around Australia and see what has been happening to the historical property values over the past 24years and rents over the past 22years within the 2-10km radius of the CBD.

Historical Median Property Values

*Source: Real Estate Institute of Australia.

You may already know that if you achieve 7.2% compounded growth per year it takes 10 years to double the figure you are analyzing. So as you can see above the capitals are all above 7.2% average growth per year.

From the above data we can see how Brisbane's median house price has increased 10.07% average per year from 1980 to 2004 and over the same time Melbourne increased 9.6% per year and Sydney 9.06%. *Source REIA.

Let's now consider Brisbane the Capital city that historically over the last 24years has had the highest growth in median property value. You're probably wondering why Brisbane has the highest growth. Well, if you read on it is also currently having the highest population growth and is predicted to continue to have the highest population growth in the next 40years or so as you will see in the population table below.

You will also notice that Brisbane's median weekly rents have also had very good increases. This is due to the high population growth which does not only put an upward pressure on the median rents, but it also gives a very low vacancy rate. As mentioned earlier because of the increase in demand we consequently have an increase in rent and median property value.

Historical Median Rents per Week

*Source: Real Estate Institute of Australia.

Now let's have a look and see what the Australian Bureau of Statistics are predicting to happen to the population of each capital city.

Australia's population as at 31/03/05 is 20 Million

Population per capital

*Source: Australian Bureau of Statistics

Population per state

*Source: Australian Bureau of Statistics

From the above date we can see that the Australian Bureau of Statistics have predicted that from 2002 to 2051 Brisbane's population will increase 76%, and that Melbourne should increase by 34% and Sydney 36%. That is an incredible statistic. The ABS are predicting Brisbane's population growth to double that of the two other major cities in Australia!

We can also see in the above table that Queensland is going to overtake Victoria in population and Brisbane is going to come very close to Melbourne's population.

When investing in residential property I always say the two most important things are that we get long term capital growth and are getting a sufficient rental return. I am very impartial to where I invest. I invest where the numbers work. I always say live where you want to live and invest where you should invest. Buy using the data above I hope you have opened the possibility of seeing where to contemplate your next investment based on numbers and statistics, not emotion.

If you require any further information or would like to discuss these statistics further please do not hesitate to contact me on 0414 637 988.

Warmest Regards,

Jim Dinas