Australia’s population will be 30 million, a standard house in Adelaide will cost $1.5 million, the average weekly price to rent a 3-bedroom house be $1,100 in Sunshine Coast and $900 in Melbourne, and Perth’s vacancy rate will be trending up towards 3 percent.
Sound fanciful?
If the trends of the last seven years are repeated over the next 7 years that will be the lay-of-the-land in 2032.
On the balance of probabilities, homeownership rates in Sydney’s inner 30-kilometre ring will be less than 50 percent, a further 200,000 (net) Australians will have relocated away from capital cities, we will endure two changes of prime minister between now and then, and Gout Gout will be the fastest human on the planet.
A quick re-cap
Before considering the next 7-years, one can appreciate ‘unpredictability’ by simply casting our minds back to 7-years ago.
This time 7-years ago, Toyota had just ceased manufacturing vehicles in Australia, a Royal Commission into Australian banking was announced, and Richmond AFL broke a 37-year premiership drought.
On the political front, Malcolm Turnbull was prime minister, Bill Shorten was (again) promising to abolish negative gearing, and the incumbent government in 4 out of 6 states was the opposite party to who’s now in office.
Back then, Western Australia was an economic mess, Queensland and South Australia were not much better, and mainland Australia had (finally) woken up to the many wonders of Tasmania and large parts of regional Australia.
Among the game-changing infrastructure projects were the commencement of construction on WestConnex (Australia’s longest road tunnel), a new stadium in Townsville and the Inland Rail Project.
From a property market perspective, the Perth vacancy rate was 5 percent, while Sydney also had plentiful rental supply and a vacancy rate trending up (eventually peaking at 3.6 percent in December 2018).
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1.3 million new homes were approved during the last 7-years. The total contribution from the federal and all state and territory governments over that period was a piddly 23,000 (or 1.8 percent).
Oh, that collection of good-for-nothing politicians pillaged $500 billion from property taxes, while shelling out $350 billion on back-ended unemployment benefits (aged pensions).
7-years ago, Australia had 80,000 properties advertised for rent and 319,000 listed for sale. Fast-forward to now, the total population is 3 million higher and the national volume of properties available has slipped to 37,000 for rent (down 54 percent) and 239,000 for sale (down 25 percent).
While there were continuous challenges over the last 7-years, Australia created an extra 2.2 million jobs.
The volume of financial transactions completed with cash decelerated from (then) 18 percent to (now) 4 percent.
Truth be known, the only constants in the world are change, housing never going out of fashion, rising taxes, human obsession with ‘artificial’ inferiority, and yours truly being a passionate Brisbane Lions supporter.
VIDEO: Property market forecasts
Property market WINNERS
Comparing the change in median house value of each of Australia’s 400+ townships over the last 7-years, below is a list of the Top 20 capital growth rates:
- Port Hedland WA (120 percent)
- Murray Bridge SA (115)
- Noosa QLD (110)
- Wangaratta VIC (100)
- Fraser Coast QLD (100)
- Burnie TAS (100)
- Bundaberg QLD (100)
- Victor Harbor SA (100)
- Launceston TAS (100)
- Karratha WA (100)
- Copper Coast SA (95)
- Broken Hill NSW (95)
- Mount Gambier SA (95)
- Tweed NSW (90)
- Barossa SA (90)
- Emerald QLD (90)
- Cessnock NSW (90)
- Rockhampton QLD (90)
- Sunshine Coast QLD (90)
- Swan Hill VIC (90)
That aforementioned list is yet another parcel of proof which refutes the many property market myths foolishly believed by the masses.
Such utter gibberish includes the size of a city, inland versus coastal, warm versus cool weather, population growth, blah blah…
While not a one-fits-all explanation, common denominators for the best performers were local economic drivers, low density lifestyles, connection to natural elements and housing affordability ~ Simon Pressley, Propertyology.
Many of those Top 20 locations have economic profiles which include agribusiness, tourism and natural resources.
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Property market FLOPS
Across Australia, most property markets performed solidly during the last 7-years.
Interestingly, 2 out of the 8 capital cities where among the 10-worst performers of Australia’s 400+ townships.
The standout common denominator was ‘wobbly’ local economic conditions.
- Melbourne VIC (3)
- Alice Springs NT (4)
- Mount Isa QLD (4)
- Darwin NT (24)
- Kalgoorlie WA (28)
- Goondiwindi QLD (37)
- Esperance WA (40)
- Wollongong NSW (40)
- Geelong VIC (40)
- Broome WA (45)
Capital Cities
With 82 percent capital growth over the last 7-years, Adelaide SA nudged out Brisbane QLD (76 percent) to be the best performed capital city.
The change in median house value for the remaining six capitals was 63 percent in Hobart TAS, followed by Perth WA (62), Sydney NSW (41), Canberra ACT (51), Darwin NT (24), and Melbourne VIC (3).
Related article: Sydney median house price to reach $3.5 million
2026 to 2032
Looking ahead, logic suggests future rates of capital growth will not maintain the lofty levels of recent years.
That said, no one is pulling any levers to produce a meaningful increase in the volume of properties available to buy and to rent.
And current housing policies display a total lack of acceptance of homebuyer priorities, human relocation patterns and homeownership trends.
Unless there’s a major global catastrophe, it is probable that the RBA Cash Rate will hover between 2.5 percent and 4 percent over the next 7 years.
One would be wise to ignore the nonsense notion which suggests that property markets ‘take turns’ with growth cycles. Such rubbish is often expressed in miss understood mutterings about ‘Mean Reversion’ and ‘Property Clocks.’
Regardless of population growth rates or whether a location is a capital city or a regional location, the single biggest driver for each township’s property market performance will be its local economy and the various factors that influence economic performance.
Propertyology are national buyer’s agents and Australia’s premier property market analyst. Every capital city and every non-capital city, Propertyology analyse fundamentals in every market, every day. We use this valuable research to help everyday Aussies to invest in strategically-chosen locations (literally) all over Australia. Like to know more? Contact us here.
