Population boom for Perth and Brisbane

Population boom for Perth and Brisbane

Posted on Thursday, August 02 2012 at 10:57 AM

Perth’s population growth has not only led the national race over the past decade alongside Brisbane, but its estimated population over the next 44 years is also well ahead of the pack. So are infrastructure and house prices keeping pace? API investigates.

According to the recently
released Australian Bureau of Statistics (ABS) 2011 Census, Perth and Brisbane
tied in first place for population growth between 2001 and 2011, ahead of all
other capitals.

In this period Perth and
Brisbane boosted population figures by 25.2 per cent, while Darwin followed in
second place with 20.8 per cent growth, Melbourne took third place at 18.3 per
cent, Canberra recorded 15.2 per cent, Sydney posted 11.6 per cent, Hobart
achieved nine per cent and Adelaide grew by 8.8 per cent.

The ABS’ population
projections also report that Perth and Brisbane will be the clear winners into
the future to 2056, with Perth’s population estimate a mighty 116 per cent
climb between 2007 and 2056 and Brisbane’s estimated population up 114 per

Perth-based buyers agent
Damian Collins of Momentum Wealth says the western capital is on the cusp of a
positive evolution with major planning and transport reforms already under way
to support the projected population boom.

Unlike most other capitals,
house prices are already rebounding, he adds, reflecting the increasing demand
from the growing population.

Collins says Perth’s
waterfront facelift is under way, with a flourishing bar, café and cultural
life and increasing development of more diverse housing styles. “There are
signs of vibrant change everywhere.

“It’s a case of more
people, more social activity, more cultural activity and more demand for
housing,” he says.

“Evolution is under way and
20 years from now this city will look very different.”

While the Perth market has
been in the doldrums since 2007, Collins says there are many positive signs for
the city’s future, reflected in the 14 per cent population increase in the five
years to the 2011 ABS Census.

Collins says some
properties in some Perth suburbs are now 10 per cent higher than one year ago
and with rental vacancies now at 1.7 per cent, rents have risen five per cent
since the end of 2011.

Prices aren’t likely to
slow down either, says Collins, as he expects the next few decades to see
significant structural transformation occurring in the Perth property market to
accommodate the massive influx of workers required to service the booming
resource sector.

Projections indicate that
Perth will ultimately grow from a relatively small population of under two
million to a city of four million, “similar in nature to Sydney and Melbourne”,
says Collins. 

He notes that some key
features of this structural change include more infill development closer to
the city and, as a consequence of this, greater congestion of the city’s roads.

“Like Sydney and Melbourne,
demand will markedly grow for property that is close to public transport,”
Collins says.

“The changes will have an
impact on demand for both residential and commercial property that is close to
public transport.

“While Perth’s workforce
has predominantly been happy to drive to work, people will increasingly seek
workplaces and homes that can easily be reached by either train or bus.”

Collins says the Western
Australian Government’s Directions 2031 planning document, which
stipulates that 47 per cent of new dwellings must be infill development,
provides the blueprint for a vastly different looking city.

“On a world scale Perth’s
housing is very low density and while we have seen more infill development
closer to the city over the past five years, there’s still reluctance to it in
some areas,” he notes.

“However an ageing
population, a new generation of homebuyers who want to be close to the city and
an influx of immigrants who are more accustomed to different housing styles
will drive demand for increased density living.”

The planning changes under Directions 2031
present great opportunities for investors, but Collins warns against investing
in high-rise apartment developments close to the revamped city centre.

“CBD properties may perform
well in the short term, however they will underperform over the longer term as
developers bring on substantial supply,” he says.

“Instead, investors should
look towards suburbs that are near public transport and within easy reach of
the CBD or places of employment and where available property is in limited

On behalf of his clients,
Collins selects properties near key amenities and infrastructure, which possess
other desirable attributes such as renovation or redevelopment potential.

Even in what’s generally
been a flat market, certain properties have increased as much as 10 per cent in
the past 12 months, says Collins.

“For example, a property
purchased in Padbury 12 months ago that was purchased for around $425,000 is
now worth between $460,000 and $480,000.

“In Morley a property
purchased for around $460,000 in 2011 is now worth between $490,000 and
$500,000 and another one in Dianella purchased at the same time for $390,000 is
today worth $440,000.

“So, when buying it’s not
just about the suburb, it’s also about buying the right property in that

Collins says quite a few
suburbs within a 15-kilometre radius of the city, which are currently off the
radar of investors, have the potential to outperform the market.

Just as Melbourne’s St
Kilda and Port Melbourne gentrified into trendy and highly sought after suburbs,
many Perth suburbs will become increasingly desirable to those on higher
incomes, he notes.

South of the Perth CBD,
Victoria Park is becoming increasingly desirable to more affluent buyers, while
the near airport suburbs of Belmont, Redcliffe and Cloverdale will rise in
popularity, Collins says.

“Similarly suburbs such as
Bayswater, Bedford, Dianella and Yokine will become more attractive to the
upwardly mobile.”

In Brisbane, the second
capital in line for a projected population boom behind Perth, buyers agent
Scott McGeever of Property Searchers says the winning suburbs will be the
transport hubs where rezoning has either already occurred or is under way.

He lists Indooroopilly,
Toowong, Carindale and Mount Gravatt as some examples.

Investors should also look
to where the mining executives are buying and renting. “These tend to be in the
green and leafy areas in Brisbane’s west and northwest. Suburbs like Ashgrove,
Bardon and Toowong.”

While the green and leafy suburbs are easily
accessible to the Brisbane Airport for fly-in, fly-out mining executives and
workers via the Inner City Bypass and the recently opened Airport Link road
infrastructure, buyers agent Zoran Solano of Metropole Properties Brisbane says
suburbs such as Clayfield, Nundah, Albion and Windsor are also likely to
increase in demand due to their even closer access to the Brisbane Airport for
fly-in, fly-out mine workers seeking lock-and-leave units or apartments.

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