Australia's Housing Market Heats Up!

Housing demand in Australia's four most populous states is set to rise significantly over the next two decades, driven by an expected national population increase of 7.4 million, according to analysis by Informed Decisions, a subsidiary of PEXA.

Victoria is projected to experience the largest population growth, with two million more people expected by 2041, followed by New South Wales, Queensland, and Western Australia. This population growth is seen as a key factor in driving housing demand and potential price growth. However, experts stress that an adequate supply response is crucial to meet this demand.

The report also reveals that Melbourne and Sydney are expected to lead in population growth, with Melbourne adding 1.6 million people by 2041, and Sydney expected to see a growth of 1.2 million. The need for additional housing in these cities is substantial, with Melbourne requiring around 723,000 new homes and Sydney needing 582,000.

In both cities, certain areas are poised for stronger population growth, leading to higher housing demand, while other suburbs are highlighted as potential areas for new housing supply. These trends present investment opportunities in both cities, with Melbourne showing promise for future house price growth and Sydney having specific areas of strong population growth and housing demand.

Overall, this analysis underscores the importance of addressing the housing supply issue to accommodate the growing population in Australia's major states and maintain stable vacancy rates and affordability.

Source: https://www.rba.gov.au/publications/fsr/2023/oct/household-business-finances-in-australia.html#2.2