By: Rosemary Johnston- Thursday, October 25, 2012
Unlike what many say population growth statistics can identify the areas that have above average opportunity for growth, capital growth, the sort we investors love! In my nerdy review of good due diligence sources the ABS data is outstanding. Yes, they have been recently criticised for over estimating the growth by a number of hundreds of thousands across Australia, however their actual Census data and estimates are still a fabulous source of information.
If you want to identify an above average opportunity you need to look at this as a measure of demand, for rental properties initially and then for resales. This is the overview, then we need to dig down into the facts about the area. However I am getting ahead of myself…
The ABS publish a great section on regional population growth that gives us statistics by local government area (LGA). It is given visually in great coloured maps showing each LGA area indicating the rate of growth. Go to the first web link and select your state to review what is going on. The second web reference gives you NSW data. If you want to drill down further and know the numbers for an area select downloads tab and select Population estimates by local government area – 2001 to 2011. Download the excel spreadsheet and you have all LGAs in Australia! Select your state of interest and scroll down for the Council name which is in alphabetical order.
This data offers more as it shows trends. We can look at the actual growth over a number of years and see the trend of growth. In other asset classes we would now trend the data and study what the trend is telling us. If it is up we need to investigate why. This additional due diligence helps us to work out the opportunity, how risky it is, how predictable, how long lasting and hence if we are closer to being able to identify an above average opportunity for investment. Great stuff and all for free from our Federal Government! Love it!