Fastest Growing Cities = Perth, Melbourne, Brisbane

Not surprising really. From ABC Online.

Not surprisingly, Adelaide missed the list. You can tend to see how well a place is doing by looking at the number of cranes in the CBD — Adelaide doesn't have too many, while I did notice Brisbane in February did have a large amount of development going on.

A snippet from the article:

New figures on population growth in Australian cities are putting pressure on governments to manage urban sprawl.

The Australian Bureau of Statistics' latest data show that the rate of new arrivals in Sydney has halved since the Olympic year of 2000, and that Melbourne, Brisbane and Perth have firmed as the nation's fastest-growing cities.

Demographer Bernard Salt, a partner with KPMG and the author of The Big Shift, has documented the so-called 'sea change' phenomenon.

"Every 10,000 people that move to a city take with them $80 million in new retail spending," Mr Salt said. "That will create demand for around 3,000-4,000 new households or houses.

"Population growth generates wealth. It also contributes in some way to urban sprawl but that really is up to the city to manage that growth.

"It's a double-edged sword. On the one hand, it is economic growth; on the other hand, there is the necessity to manage the sprawl."

So I suppose, long term, that investing in these cities would yield the greatest capital growth; and would, in general, fair better in less buoyant times in the property cycle.

Food for thought.
 
I don't like to reply to my own threads before others, but the article mentions Bernald Salt's book The Big Shift. Has anyone here read it? Is it worth reading, from a property investing point of view?

Thanks. :)
 
The book is a bit repetitive and the subject is dry. However, the content is there and at times very fascinating. He documents the rise and rise of the gold coast and points out how previous demographers got it wrong 30 years ago with the steel producing towns. Has been pretty spot on with some areas that he sees having the same growth as the Gold Coast, such as Mandurah WA and NQ etc. It took me a few weeks to read the book (its only 100 pages or so) as I would read a little every evening. Worth buying a copy to understand a little more abut how our island works, plus I imagine that we are going to hear more from Bernard in the future (I hope).
 
Merovingian said:
So I suppose, long term, that investing in these cities would yield the greatest capital growth; and would, in general, fair better in less buoyant times in the property cycle.

This appears to have some truth.

McKnight's '$1m Property in One Year' provides some graphs from REI stats on median prices 1980 - 2004. These graphs show lenghtly flat or no growth periods in prices (varying between 52 and 84% of the time).

I will then classify cities according to pop growth and see if there is any correllation between this and flat periods (the stats for which are in McKnight's book).

HIGH POP GROWTH
Brisbane 79%
Perth 67%


MEDIUM POP GROWTH
Sydney 52%
Melbourne 62.5%


LOW POP GROWTH
Adelaide 83%
Hobart 84%


It is true that the low growth cities have had lenghty flat periods. But then so has Brisbane, which is a high pop growth city. However Brisbane has had an extraordinary boom, which has made it more volatile than Perth, the other high growth city.

Sydney and Melbourne had the least time of flat or no growth. However as declines have been steeper in Sydney it would be wrong to conclude that Sydney has been the least volatile.

City size appears to be as important as pop growth rates in predicting which cities have the shortest stagnant/low growth periods. Nevertheless, apart from the late 1980s/early 1990s period, Perth appears to have best exhibited the pattern of stable growth (the graph being more straight than dish-shaped).

Though there is a rough correllation between average house prices and city size, this is not always the case. For instance, Hobart's median price is now the same as Perth's. Canberra is expensive for its size. Small 'seachange' towns (eg Margaret River) have capital-city level prices, whereas established low pop growth inland towns are the cheapest of all.

Rgds, Peter
 
Thanks for that, Peter. :)

That's some good food for thought.

So basically high population growth in an area, only really contributes to market price fluctuations, and isn't the sole driving force behind them, (which was sort of obvious from the start). :p

I guess it is the magnitude of the effect of population growth, in the movement of median house prices per area/city, that would be interesting to find out...

Intriguing stuff... ;)
 
Back
Top