How relevant is population growth data for people choosing where to buy?

According to the theories espoused by some, the best places to buy are the ones with the highest population growth.

But the evidence suggests otherwise.

For example, take a look at the latest data on population growth across Australia, published by the ABS recently.

It shows that one of the states with the highest population growth has been one of the worst performers recently on price growth, while one of the states with the lowest population growth has been one of Australia’s best performers on price growth.

For the record, the ABS data on population for the 12 months to the end of March 2024, shows that the national population is now above 27 million  - 27,122,411 to be exact.

Over 600,000 was added to the national population in that 12-month period which, while very high growth, was less than the number added in the 2023 financial year.

83% of the national population growth has been due to overseas migration. In 12 months ended March 2024, Australia added over 509,000 net migrants (made up of 718,000 people immigrating to Australia and 209,000 emigrating). 

Western Australia recorded the highest percentage growth in the 12 months to March, with its population rising 3.11%, compared to the national average of 2.32%.

And that, of course, does align with house price outcomes, with Perth recording the highest price growth among the capital cities and WA achieving the highest price rises among the state and territory regional markets.

The next highest annual growth in population was in Victoria, which rose 2.72%. But property prices haven’t been rising in Melbourne or Regional Victoria – in fact, they’ve gone backwards a little in the past year. So, high population growth, particularly from overseas migrants, has not pumped up property markets in Victoria.

One of the weakest population growth rates has been South Australia, up just 1.48%, but Adelaide has been achieving exceptional growth in house prices and unit prices, bettered only by Perth. And Regional SA has consistently been an out-performer on property price growth as well.

Clearly, based on this evidence, population growth in not the big factor.

It may A FACTOR, one of a number of factors which can influence property markets, but clearly it’s not the big driver.