By John McGrath
Key findings of the 2016 Census have been released and include some fascinating insights into the changing ways we live and what this means for future home values.
So let’s take a look at the main trends and what they mean for real estate.
There’s 23.4 million of us now living in this great country – up 8.8% since the 2011 Census. Given the ongoing housing undersupply in the areas where most people want to live – our capital cities – rising population will almost certainly impact house prices.
Migration is a big part of our population growth, with almost a million more overseas-born residents registered between 2011 and 2016. We remain one of the most attractive destinations in the world for migrants, with 26% of our residents born overseas compared to 13% in the UK, 14% in the US, 22% in Canada and 23% in New Zealand.
The top five places of birth are Australia (66.7%, down from 69.8% in 2011), England (3.9%, down from 4.2%), New Zealand (steady at 2.2%) China (2.2%, up from 1.5%) and India (1.9%, up from 1.4%).
China and India are especially important here. These are two large, expanding economies and with rising incomes comes a greater desire for a better lifestyle and Australia offers exactly that. I expect an ever-increasing flow of new residents from these two countries over the long term.
Where we live
More than two thirds of Australians live in a capital city, which is one of the reasons capital growth is usually strongest here compared to regional areas over the long term. The East Coast dominates, with eight out of 10 people living in NSW, VIC, QLD and the ACT.
NSW has the biggest population at 7.5 million, with 8.1% growth since 2011, but it’s the ACT, VIC and WA that are experiencing the fastest growth at around 11% each.
Sydney remains Australia’s biggest city with 4.8 million residents – up 9.8% on 2011. But Melbourne is catching up fast, with 4.4 million residents and 12.1% growth on 2011.
In real estate terms, Melbourne will continue to be a big growth story in the short to medium term. There’s plenty of great opportunity for investment and it offers more affordability than Sydney.
The way we live
Nationally, most of us are still living the traditional dream of a house and backyard, with 72.9% of homes being houses in 2016 – down from 75.6% in 2011.
However, there has been an increase in people living in smaller homes such as apartments, semis, townhouses and terraces. This has risen from 23.5% in 2011 to 25.8%. There are a few reasons for this.
1. In big city markets like Sydney and Melbourne, affordability is certainly a factor in more people living in smaller dwellings, particularly apartments. In Sydney alone, 28.1% live in apartments today, up from 25.8% in 2011.
2. There’s a growing number of couples without kids. They represent 38% of families – up from 32% in 1991. Couples without kids don’t need the quarter acre block, so apartments, semis and terraces are ideal. These couples include empty-nesters and young couples either delaying children, or choosing not to have kids at all.
3. One in four households are lone-person households, up from one in five in 1991. This reflects a few trends, one of them being our aging population. One in six of us are aged over 65, compared to one in seven in 2011. Apartments provide a lower-maintenance lifestyle suitable for singles.
Another change in the way we live is the rise of multi-family households. While it’s still a small percentage of household types overall, the number has almost tripled from 0.7% in 1991 to 1.9% in 2016. This reflects two trends:
1. More typical families are living with their in-laws due to housing affordability and the need for help with the kids, thus reducing child care costs; and
2. We have a rising number of overseas-born residents and it’s tradition in many cultures for several generations to live together.
The Census shows 31% of Australians own their homes outright, down from 32.1% in 2011; and 34.5% own with a mortgage, down from 34.9%.
Renting is increasing – largely due to affordability – with 30.9% of homes currently rented, up from 29.6% in 2011 and 27.2% in 2006.
Renting has increased more dramatically in expensive cities like Sydney, where renters comprise 34.1% of dwellings – up from 31.6% in 2011.
Now that the Census is out, it’s a great time to do some new research. The Census provides a great snapshot for property investors considering new locations. Use QuickStats to research individual suburbs and look for markers such as population growth, changes in housing stock, income growth and the top professions to get a feel for who lives there and what the market is like.
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