Property Growth – What’s Driving It?

Demographics are one of the big drivers of our property markets.  Money manager Jeremy Grantham recently wrote that America has some of the best demographics in the world.

From now through to 2050, America’s population is forecast to rise by 50 million.

– China’s will fall by 101 million.

– Russia’s will decline by 10.3 million.

– Germany, down by 7.7 million.

– Italy, down 1.1 million.

– Finland, down 155,000.

– Greece, 600,000.

But he left out Australia.

Australia’s growing population will eclipse America’s growth percentage wise, and will be one of the key drivers of our property price growth.  You can see how many of us there are  at the Australian population clock –  there are currently over 23.87 million Australians.

This assumes growth on the following basis:

• one birth every 1 minute and 42 seconds,

•  one death every 3 minutes and 34 seconds ,

•  a net gain of one international migration every 2 minutes and 14 seconds, leading to

•  an overall total population increase of one person every 1 minute and 20 seconds .

ABS Demographic Statistics show that in the 2013-14 financial year, Australia’s population grew by 1.6% (365,000 people).  Sure it takes more than population growth to fuel our markets but it’s an important growth driver and while in the USA their population is forecast to grow by 50 million by 2050, some estimates suggest Australia’s population could close to double in that time.  In fact at current growth rates the population of Melbourne and Sydney will increase by around 10% in just over 5 years.

Now that’s a strong growth driver for property markets.

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