Nick Reade, Chief Executive BankSA
Tuesday, 24 October 2015
Population growth remains one of the fundamental drivers of housing markets across the country, and South Australia is no exception.
While South Australia’s average annual population growth rate of around 1 per cent over the past decade falls short of the national average of between 1.5 to 2 per cent, it is growth nonetheless which means more people living in South Australia and therefore more homebuyers.
And according to latest figures from the Australian Bureau of Statistics, South Australia’s current population of 1.7 million will grow by approximately 162,000 people over the next decade.
As a result, thousands of new homes will be built across the state to cater for demand, while existing housing stock will remain in strong demand as more people enter the local property market.
For current homeowners and anyone about to buy a house, unit or apartment it’s reassuring to know that your investment is underpinned by a steadily growing population.
House prices traditionally benefit as population levels increase, so as South Australia welcomes more people to the state in coming years – even at the relatively modest rate of 1 per cent growth per year – it should translate to continued sound growth in property values over time.
While no-one can predict with absolute certainty how house prices will fare in the future – or our population rate for that matter – history continues to show that real estate is a solid investment.
Over the past decade the median house price in Adelaide has jumped from $275,000 to $428,000. This is a significant return on investment, particularly when you consider the challenges our economy has faced during that time.
Only time will tell whether similar growth is achieved over the next 10 years, but the key indicators are certainly promising.