There’s been a lot of commentary in the media recently talking about varying predictions of further growth in Victoria’s property prices. Indeed, just last week the ANZ Bank forecast that the Melbourne property market would be experiencing growth at around 12 percent by the middle of next year. Whilst many of us may choose to take forecasts like these with a grain of salt, it is important to remember that the statistic we can all with certainty is that our property market will be different in the future.
For those that are keen to look into the future, one valuable starting point is the ‘Victoria in Future’ report, a document produced by the Victorian Department of Environment, Land, Water and Planning to provide projections for Victoria and major regions to cover the years 2016 to 2056.
This report looks at Victoria’s demographics and shows that our population has increased by a million people since 2011 and is expected to grow by an average of 125,000 people per year in the future. That means we are expected to have over 11 million residents in Victoria by the early 2050’s, with 9 million of those living within the Greater Melbourne area.
A closer look at this report shows increasing numbers of births, longer life expectancy and strong migration both from interstate and overseas are all contributing to this growth. Current forecasts show that the number of births in Victoria is expected to increase from close to 80,000 per year today to 120,000 by 2050. We are also expected to live longer, with the average life expectancy of men going from 82 years to 87; and from 84 years to 88 for women.
What do demographics like these mean for the Victorian property market? One simple answer is to view them through the prism of simple economics. A market where demand is constantly growing, (and the supply of new housing is not meeting that demand), must inevitably push prices higher over the long term. That’s good news for those that are already established on the property ownership ladder, but it’s a timely reminder for anyone who is yet to get their foot in the door that the best value they can hope for is to buy today.
If you are considering selling this year, it’s worth remembering that the official end of the Spring market is now just five weeks away. So if you want to avoid costly mistakes when selling your property, you’ll find lots of helpful tips in our free booklet“Fatal Real Estate Traps Exposed”.