By John McGrath
Last year, Melbourne was once again named the world’s most liveable city for the fifth consecutive year in The Economist magazine’s 2015 Global Liveability Rankings.
It was ahead of other revered cities including Vienna in Austria; Vancouver and Toronto in Canada; and Adelaide which tied for fifth spot with Calgary in Canada.
And it seems more and more people are recognising Melbourne’s excellent lifestyle and relatively affordable property compared to Sydney, with new population statistics from the ABS showing Melbourne was Australia’s fastest and largest growing city for 2014-15.
Population growth is reported by the ABS in two ways. Fastest growth relates to growth in percentage terms for a particular area; whereas largest growth relates to the actual number of people who moved into the area. Melbourne was No 1 by both measures in 2014-15.
Why does Melbourne have the top level of population growth? There are two main factors:
1. Historically high interstate migration
2. Rising overseas migration and investment
Although Sydney and Melbourne are both cooling right now following the boom, we expect steady ongoing price growth, particularly for houses over the next few years. But Melbourne has a bit more scope for growth because its median house price is substantially lower.
This is proving attractive to an increasing number of Sydney families struggling to afford the next level of home as their families grow. They’re looking to Melbourne where jobs are plentiful and there are lots of good schools and facilities. Over the 2014-15 year, 1,760 people per week moved to Melbourne compared to 1,600 moving to Sydney.
Melbourne also remains the number 1 city of choice for foreigners (mainly Chinese) entering Australia via the Significant Investor Visa. International developers also love the city, with a Singapore company currently building what will become Australia’s tallest building – a 108-storey high rise apartment complex called Australia 108, in the city’s Southbank precinct.
Overall, Melbourne recorded a 2.1% boost to its population in 2014-15. Seven out of Australia’s Top 10 growth areas were in Greater Melbourne and these were concentrated in the outer suburbs and inner city, which was a trend seen in many other capital cities as well.
Australia’s largest growth area was Cranbourne East in Melbourne’s outer south-east (up by 4,600 people). Next in line was South Morang (4,200) and Epping (3,300) in the outer north; and Point Cook in the outer west (3,200). Impressive growth was also recorded in inner city Melbourne (up 2,600 people).
Looking beyond Melbourne, the new data also showed that outside the capital cities, the fastest growing regional population was in Queensland. Classified as ‘Rest of State’, the Queensland regions grew by a collective 1% in 2014-15 compared to 0.8% for regional NSW and 0.6% for regional Victoria.
Significantly, 5 of Queensland’s Top 10 largest growing areas were outside Brisbane, including:
1. Upper Coomera-Willow Vale on the Gold Coast (up by 1,500 people – the largest growth of any area outside Australia’s capital cities)
2. Deeragun (1,300) in northern QLD
3. Pimpama (1,000) on the Gold Coast (also the fastest growing area outside any capital city, up 20%)
Population growth is one of the biggest influencers of property prices in Australia. Ongoing population growth especially in undersupplied environments like Sydney and Melbourne means greater demand for housing and higher prices due to stronger competition.
Here’s a rundown of population growth across the capital cities, listed in order of percentage growth. Also included are the 3 fastest and largest growing areas in each state.
2. Northern Territory
3. New South Wales
4. Western Australia
6. Australian Capital Territory
7. South Australia
Source: Australian Bureau of Statistics
If you liked this article you'll love the Switzer Report, our newsletter and website for trustees of self-managed super funds. Click here for a FREE trial and to hear more of Peter’s expert commentary and advice.