Australia is a young country, federated a mere 117 years ago. People have actually outlived our nation. We may lack age, but with an estimated resident population of 24,590,400 our society is exceeding expectations. We hit a population of twenty-four million seventeen years ahead of Australian Bureau of Statistics forecasts, outperforming long run trend expectations that we would reach current numbers at most by 2031.
These outlandish levels of growth are the result of one of the world’s most efficient immigration systems and the baby boomer generation boosting birth rates to a level never seen before. As a consequence, Australia currently displays the highest rate of population growth out of any medium to large OECD country in the world. Seen below, we are moving faster than anyone expected.
Source: ABS-Cat 3101.0 Australia Demographic Statistics, June 2017/ ABS population projections 1997-2051
Over the last year our country gained another 388,100 residents, 245,000 of which were introduced through immigration and the remainder through natural increase. Widely acclaimed demographers such as population expert Bernard Salt expect our society will continue to grow at a rapid pace for the next four decades. This is largely due to the compounding effect of our ageing population and appealing lifestyle.
Thirty-eight million residents will be the new benchmark by 2050 according to new data forecasts, around twelve million higher than the high-ball forecasts of the ABS. This equates to an additional 400,000 residents per year, to put that into perspective it is an increase equivalent to Greater Darwin’s population every twenty weeks. If immigration regulations are not tightened and this prediction proves to be true, it will have a manifold effect on our property sector. Capital markets will need to find room to grow, either upwards or outwards. There will be a focus on wide-scale efficient infrastructure and urban planning will have to innovate to keep up.
Let’s break down these numbers:
- Australia’s average household size is 2.6 people.
- Thirty-eight million residents by 2050, will mean an additional thirteen million residents.
- This equates to roughly 400,000 residents per year.
- At an average of 2.6 residents per household, 156,250 dwellings will be needed each year to house our new population.
Only time will tell what is to come in regard to our population, after all, our country has smashed expectations before. However, what this indicates is an inherent demand for property in the long run as naturally all these residents require somewhere to live. When taking into account that our eight capital cities occupy less than 1% of Australia’s land, I suspect concentrated demand for property is likely to drive future growth.