Increase in Property Price and Population Growth

[Jk200sx]

I presume the 2 are linked to a certain degree.

If you take a comparison of predicted population growth for 2 regional areas (lets say for the purpose of this discussion Ballarat vs Bendigo), one has a population growth of say 30%, while the other experiences a slight -ve growth over the next 15 years. In this comparison, I am only talking about the area closest to the town/cities CBD, ie within a 1km radius of the centre were all the major activities are centered.

Would you expect the city cetre with the one with the higher population growth rate to city a significantly higher increase in property prices?

Keep in mind that the overall population growth for these 2 regional areas is nearly identical at ~28%, but mostly comes from growth of their outer suburbs.

What are your thoughts?

 

[Brady]

Supply v demand

 

[Big Will]

Supply v demand

If everyone leaves Australia and no one wants to live here property prices will crash.

If everyone sells overseas and all want to move to Australia the property prices boom.

Economics 101 - Supply vs Demand

 

[Jk200sx]

Thanks for your replies so far.

But what I'm trying to get at is that these 2 (non disimilar)regional cities have different projected population growths; one is 28+ve, the other is -ve. I'm refering to areas within 1 Km of the main part of Sturt St for Ballarat, vs 1km from Mitchell st in Bendigo. Would you expect both these areas to experience similar property value increases in the central location, given that one of the 2 will not have the projected population growth?

 

[Brady]

What we said applies.

I don't think you can expect somewhere that's going to have a population decline to have the some growth as somewhere that's going to have a large increase. You need to look at other factors. Will the supply of houses increase to accomodate the increased population, if these extra houses are built where will they be built. The area you're looking in will it still be in high demand compared to the new stock.

What about incomes, will incomes increase allowing people to buy for higher price, will there be jobs for the increase population... can really go on for a while.

You need to do some decent DD population growth alone doesn't cut it.

 

[knightm]

You need to do some decent DD population growth alone doesn't cut it.

^^^ what they said. What are your projections based on? I have spent time in Bendigo and Ballarat but am no expert in them as towns, I would not have expected the population growth figures overall to be so different.

Are you saying the suburb specific population forecast is what you are measuring? Or the towns overall?

 

[Jk200sx]

yes, I'm referring to the suburb specific forecast.

 

[knightm]

yes, I'm referring to the suburb specific forecast.

I am not sure where you are getting your suburb specific forecast (is it forecast.id?) but you might want to check out what this is based on and decide how reliable you think it is.

In some areas I will deliberately target areas with high overall population growth, but sub area with low population growth. This could be because (for example) you have an established suburb (A)on the water, and a new estate in a new suburb (B) off the water. B will have massive population growth prediction compared to A, but all those new families will be building project homes on unlimited land off the water. Eventually many of them would like to live closer to the water, so my approach (assuming its good value) would be to target the cheaper, older housing closer to the water to catch the capital growth which I know will occur through a process of gentrification (knockdown/rebuilt/renovate) despite the lower population predictions compared to suburb B next door.

Make sense?

In short I believe overall population predictions are very important but at a micro level they could be misleading.