What does this mean for Australia?
There is no doubt that our population growth will bring with it significant, social, infrastructure and environmental impacts.
In Australia at present, 87% of us live in urban areas. With an obviously emerging trend toward smaller dwellings and inner city lifestyles, more of us are going to be concentrated in our major capital cities.
With more and more of us wanting to live in the same six or seven capital cities and, in fact, in the same suburbs of those capital cities, our old friend the supply and demand ratio will keep pushing up the value of well-located inner suburban properties.
Sure, these properties will be unaffordable for some of us, who’ll remain tenants. But others will be able to afford these higher priced properties, as I don’t think that anyone would argue that, as a nation, Australia will become wealthier over the next few decades.
Australia is well positioned to benefit from the growth of Asia, which represents 50% of the world’s population.
We stand poised to capitalise on an economic transformation unparalleled in our nation’s history, with a resources and commodities boom capable of generating $480 billion of exports a year and creating 750,000 jobs over the next 20 years.
But there’s more to it that that…
Currently over 80% of our exports to China are resources, however looking forward China offers markets of enormous proportions for all the modern services that a developed economy like Australia has to offer. We are in a prime position to supply the world’s fastest-growing major economy with food as well as a raft of products and services.
One more thing…
If we play our cards right, Australian tourism could be boosted as we become the playground of the new rich in China who will want to holiday in a nearby country, just as we were a preferred holiday destination of the Japanese in their heyday in the 1980s.
According to the ANZ Bank, almost $2 trillion needs to be invested in the Australian economy for our nation to capitalise on the mining boom caused by the developing world’s march towards urban industrialisation.
While our new economy will be underpinned by mining, the benefits will flow through to the services, education and tourism sectors and our property markets.
In summary
While there will be ups and downs and lots of problems ahead, we are indeed the lucky country and our economy will remain the envy of the developed world. Needless to say, a strong economy is good for our property markets.
So if, like me, you are confident that Australia has a prosperous future and, at the same time, our population is going to grow, this means we’ll have more people who will need property for shelter and their prosperous lifestyles will allow them to afford quality property.
This means the long-term viability of our property markets is assured.
I’ll be explaining what I see happening in the short term at my National Property Market and Economic Updates around Australia next month. Click here for details. It would be great if you could join me.
Michael Yardney is the director of Metropole Property Investment Strategists, a best-selling author and one of Australia’s leading experts in wealth creation through property. For more information about Michael, visit www.metropole.com.au and www.PropertyUpdate.com.au.
