When it comes to the property market, there’s a lot more making it tick than meets the eye. We’re building a series on four key drivers that can affect the property market – either pushing prices up or down. Driver one is population and demographics. Read more to find out how this macroeconomic influence alters property values.
Defining population and demographics
Population refers to the number of people living in a place, for example, the population of Perth. Demographics refers to the composition of this population; in other words, their age, gender and so on. This data can be useful at many levels, for example, to understand the general composition of a whole city, a particular neighbourhood or to assess growth in an area. You may have a strong understanding of the population and demographics in your area, but do you know how they affect property values?
How does the population affect property markets?
Population data is strongly linked to supply and demand – a micro factor we’ll explore in a future article. Generally speaking, when a population is growing, there will be a higher demand for housing which can lead to price increases, especially when there is low housing supply. When a population is shrinking, the opposite can occur. It’s essential to assess supply and demand in conjunction with population data, as a growing population alongside a burst in new developments may mean that supply levels meet future demand. In this case, the property market may experience positive price growth.
Using demographics to your advantage
Demographic data is excellent for mapping trends in housing. Understanding the type of housing preferred by people in certain age groups or income brackets can help investors choose wisely to meet the demand for rental properties. For example, if there is a large population of families, then detached homes may be of high value. In comparison, a large population of active retirees may see an increase in the downsizing trend to smaller units and apartments. Mapping this data over time can help you to predict upcoming trends and get into the market at an early, more affordable time.
Where can you find relevant data?
There are many services offering population data for Perth. However, the most accurate comes from the government. Census data can offer you a snapshot of the population by location and is useful for tracking population trends over time.
Find your perfect property in Perth
With over 30 years of experience developing properties, Norm Carey has experience in varied property markets throughout Australia. To learn more about upcoming projects, contact our team. You can also follow more property tips and news on our blog.
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