Investment Property and Population Growth

By: Rosemary Johnston – Monday, October 29, 2012

Most of us want to achieve an end result through investing.  We have a goal, that goal for many of us is not crisp and shiny so we can see it clearly.  It needs to be.  We need to have an end point defined in a way we can measure.  For most of us this is an amount of income per month in a number of years time.  And that sounds suspiciously like a business target.  We are actually creating a business to fund our retirement needs!

Businesses have different needs:

They need goals so we can work out if we are getting closer or not.

They need exit strategies so we can shift from debt holdings to income

They need measurement methods so we can work out if we are getting an optimised performance and every dollar is working hard

For most of us we have begun from a different framework and it can take some time to work out what we need to do and what we need to pay attention to, for me population growth as a measure of demand is vital.  If an area has above average population growth it is a good sign, I can then dig down into the demographics to understand how many people per household, what sort of incomes they have, where did they come from and what that may mean for new housing demand for my resales considerations and for rental demand for my holding strategy.

There are two sources of information I like, one is the IMF that publishes an ongoing graph of our population growth over time.  This is useful as it shows me the trend.  If it is up then in 18 -24 months time for local migration and 4 year later for 457 visa immigrants are the average buying periods, in the meantime they rent.  If it is down or steady I need to work out what that means for local demand.

Current data is 1.4% growth for 2011.

Next time ABS data by postcode…