There’s a lot to love about Melbourne; rich in culture, diverse in demography and never short of good coffee. It’s little wonder why the city’s been voted the most liveable in the world for six consecutive years.
While these would make some decent talking points for a tourism ad, it’s the city’s numbers that have us excited. In particular its economic and population growth and its housing affordability.
Here’s what you need to know:
- Economic Growth
In 2016, the nation as a whole had a net gain of 91,500 jobs as the winding down of the mining boom continued to dampen the economy. Victoria alone created almost all of Australia’s jobs, with 118,500 last year. That figure was roughly 100 times better than NSW, which added just 1,100 jobs over the year. Acting Victorian Treasurer Robin Scott said the government’s infrastructure pipeline and “sound financial management” had reaped rewards for the economy.
It’s numbers like these that have resulted in Victoria (Melbourne) having the highest rate of population growth of Australia’s capitals. Queue point 2.
- Population Growth
Melbourne has added close to 100,000 new residents each year for the past three years – the highest of any Australian city. With population growth like this, Melbourne needs to add 45,000 new dwellings per year, or nearly 1,000 per week. A record 17,000 Australians migrated to Victoria in 2016, largely a result of housing affordability. Queue point three – I love it when things just come together in a neat little package.
The price to income ratios of suburbs located within the middle ring of Melbourne tend to be markedly lower than those in the inner ring. For example, the price to (household) income ratio in Inner Melbourne’s Kew is 11 (i.e. the average priced home is 11 times annual household income) as at May 2016 and a comparatively lower 4.6 in middle ring Roxburgh Park. It goes without saying that the lower the ratio, all else equal, the higher the potential for growth given relatively high disposable income. Venture 25 kilometres north or west of the city and you wouldn’t find it difficult to secure a home for under $500,000.
Before you run off and buy a property in Melbourne, remember investment success is a combination of buying the right property, paying the right price and having the right support.