Investing in property can be greatly improved through careful planning and, indeed, capitalising on the inevitable population growth and infrastructure spending occurring in major cities. The NSW government has commenced investigation into how Sydney’s current and future population’s housing needs will need to be addressed. This has produced some interesting figures that should be of interest to prospective property investors. It is possible to see how future housing trends may unfold and also establishes that demand for a variety of housing types will continue to grow.

Sydney is currently home to approximately 4.3 million people with only 1.7 million dwellings. By 2031, it is anticipated that Sydney’s population will rise to 5.6 million, for which 2.2 million homes will be required. Similarly the 2.2 million jobs currently in Sydney will rise to 2.8 million positions as the population increases.

Sydney demographics_1

In order to produce the 545,000 homes needed by 2031 approximately 27,250 are required to be built each year. To put this level of demand in context and the potential shortfall that will be experienced in dwellings, Sydney produced just 14,500 new dwellings in 2012. We envisage that the majority of new homes will be apartments, particularly as Sydney has an increasing appetite for medium and high-density living. The 2011 Census revealed that 26.7% of dwellings in Sydney are apartments with more and more families swapping ‘balconies for backyards’. In 2001 only 17% of families lived in apartments, this has now crept up to 22% and is forecast to continue rising.

Sydney demographics_2

Demand for homes within close proximity to established transport corridors will continue to be high. Sydneysiders are increasingly using public transport to get to work with 24% of people now using public transport (up from 21% in 2006). With population growth to continue and ever increasing congestion on our roads this will be an important factor for consideration when purchasing an investment property, especially one with access to good transport infrastructure.

Sydney demographics_3

After looking at the above trends it becomes possible to justify how apartments have begun to outperform freestanding dwellings in Sydney (in 2012 the median apartment value in Sydney grew approximately 3.8%, while established houses grew only 2.3%). It also alludes to how savvy investors can make the most of information and data available to them to help them make the most educated and risk balanced decision from the outset of their property search.

 

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