Reason #1. More people moved to Victoria in the last 12 months than any other state.
Listen, property investing is pretty basic. And one of the biggest factors is demand, which is another way of saying population growth.
The more people coming in the more pressure it puts on house prices and rents. And the good news for us is Victoria’s population growth is the highest in Australia by a country mile.
- How fast is our population growing?
- It’s an eye-watering 2.4% a year.
This is 50% higher than NSW – the next nearest state. And we’re on track to have Australia’s highest population, toppling our neighbours north of the Murray by 2050. To put this into context, the average growth Australia wide is 1.6%. The next highest growing location is the ACT which, lets face it is tiny and not even a state is 1.8%. Nowhere else even beat the average.
Yet here’s us, growing at a staggering rate. And all these new people need somewhere to live, which is putting enormous pressure on housing. Houses don’t just appear overnight, and people are paying more and more to get their foot in the door.
If you think people won’t be prepared to pay over $800,000 for a house you might be right. And there are plenty of houses and apartments which are far more affordable and are going to be in huge demand for years to come.
When you own one, two, three or more properties you’ll be in charge of an asset which people desperately want, and are willing to pay anything for.
Which brings me to the second reason.
Reason #2. We’re falling dangerously short on housing
I’m sure you know about supply and demand. They’re the basic laws of economics.
When demand, like population his high prices increase. And when supply is low prices also increase.
Both together is a double hit – and it’s exactly what we’ve got.
According to the Urban Development Institute of Australia, Victoria is facing a massive housing supply shortage.
It’s estimated to be 50,000 properties by 2020, barely 2 years away.
Our government has been blindsided by the massive influx of people. And they’ve failed dismally to plan for it.
New housing estates are being wrapped up in red tape.
And active, almost militant community groups hell-bent on stopping new development in their areas.
Even if the government waved a magic wand and approved lots of new developments today it would take years before people could move in. The approvals, planning, infrastructure and everything with it take way too long.
It’s not just Daniel Andrews to blame either. Previous governments failed to get their act together.
In 2013 Matthew Guy, now the Liberal opposition leader announced:
“Melbourne had reached its geographical limits and the days of expanding the urban growth boundary were over.”
A physical boundary was placed around our city, strangling supply and starting a new house price boom which still has no end.
And today new arrivals are being thrown into a feeding frenzy to find somewhere to live.
How bad is it?
Not long ago 300 desperate renters queued 100 metres down the street in Collingwood just to view 26 units.
There were so many the property managers fielded offers of up to $50 more a week just to accept their applications.
Today, our vacancy rate is just 2% vacancy rate. This means out of every 100 rental properties only 2 are vacant.
And since you’ll always have a few vacant as people move around, it’s pretty much putting out the ‘FULL’ sign, giving landlords the freedom to charge virtually anything they please.
And that means higher rents and better returns for investors.
Reason 3. Victoria’s Booming Economy
In case you think our massive population growth is a fluke, think again.
It’s underpinned by a booming economy.
According to CommSec, our economy is the fastest growing in the country. We are second only to NSW and we’re catching them fast. It won’t be long before we’re officially the economic powerhouse of the nation.
In the last year we enjoyed the highest employment growth in the nation – almost 100,000 new jobs compared to NSW which is just over 60,000.
Huge result, right?
More jobs means more cashed up people who can afford higher prices and rents.
Best of all though, a booming economy is like a snowball. Businesses see how great Victoria is going and they move here to take advantage.
And our local businesses grow too.
This means more jobs, more money and more spending on these businesses. Once it starts it’s very hard to stop. And this is why Victoria’s real estate isn’t just booming now, we’ve got years, even decades of golden times ahead.
Reason 4. Melbourne is the world’s most liveable city
The Economist Intelligence Unit have ranked our beautiful city as #1 in the world.
And we’ve held top spot since 2011.
That’s an unprecedented 7 years in a row.
Sydney, on the other hand has crashed out of the top 10.
Now, this isn’t just based on someone’s opinion. The Economist Intelligence Unit are considered the world leading authority on liveability.
Each year they perform a comprehensive survey on 140 cities across the globe. And they assess each one on 30 factors across infrastructure, education, stability, healthcare and environment.
Add to this the history behind our amazing city, our beautiful tree lined suburbs, our nightlife and restaurants, European café culture and our bayside beaches it’s no wonder people are flocking here from all over Australia and the world.
Reason #5. The state government has accepted they have lost control over house prices
Even the state government has given up on the idea of lower house prices.
Recently they took a massive new direction from trying to keep prices low for first home buyers to letting the market set the prices and instead helping new buyers get into the market.
They scrapped stamp duty for first home buyers up to $600,000 with concessions from $600,000 – $750,000.
And they have introduced a new program where you can co-own your house with the government with as little as a 5% deposit.
Listen, these aren’t just random incentives. It’s a reluctant admission they can’t hold back the tide any longer.
And it’s a sure sign things are only just beginning.
Reason #6. The experts agree – Melbourne property is set to boom
It’s not just me who is confident in Melbourne property.
One of the nation’s leading research houses SQM Research predict price growth of up to 12% in 2018 in Melbourne.
This is the highest growth prediction in the nation.
And that’s an average.
Some suburbs will go up less while others could go much higher.
Compass Economics chief economist Hans Kunnen expects a more modest 5% to 10% growth over the next 12 months, which is still great news for investors who can pinpoint the best performing suburbs.
Our job as Melbourne investors is to identify which suburbs are set to boom well above average, and use a proven strategy to get in there and create wealth as quickly as possible so we can go again and again.
And this is what Real Estate Fast Track is all about.
Showing you what’s driving Melbourne’s boom, sharing the latest strategies from our property, finance and accounting experts and giving you a proven system for creating wealth.