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Population growth to fuel Western Australia and Queensland hotspot growth

Australia’s population has grown to 26.5 million, with Western Australia the fastest growing state, according to new research from the Australian Bureau of Statistics (ABS).

The figures show that the national population grew 2.2 per cent in the 12 months to March 31 this year, while Western Australia’s population increased 2.8 per cent.

It comes as little surprise then that Western Australia dominates Henderson Advocacy’s Rent Gaps report, which identifies the nation’s top 20 investment suburbs.

According to the ABS, Western Australia’s population grew by 78,300 residents to 2,855,600 in the year to March 31.

NSW remains our most populated state with 8,294,000 residents, up 1.9 per cent or 156,300.

ABS Head of Demography Beidar Cho said overseas migration fuelled the population growth.

“Thirteen months after international borders were re-opened, net overseas migration accounted for 81 per cent of growth and added 454,400 people to the population in the year to March 2023,” she said.

Net overseas migration was driven by a large increase in arrivals (up 103 per cent from last year to 681,000) and only a small increase in overseas migrant departures (up 8.8 per cent to 226,600). 

Western Australia also features 16 suburbs in the national top 20 in the Rent Gaps: The key to identifying Australia’s top investment suburbs report.

Produced by buyer’s agency Henderson Advocacy, in conjunction with SuburbTrends, the report is described as a “mirror reflecting the supply-demand imbalance in the rental market.

Rent gaps are calculated as the percentage difference between the growth in rent prices and property values over a one-year period. 

So, if a suburb has a Rent Price Gap of 19 per cent, as seen in Merungle Hill in NSW, it indicates that rents have surged 19 per cent more than property values over the past 12 months calculated using the area rental median.

A pronounced rent gap typically indicates a buoyant rental market. 

“Rent gaps serve as a useful indicator for investors, suggesting areas where rental markets are active and property investments could show promise,” Henderson Advocacy Director Jack Henderson said.

Parkwood in Western Australia took out the top spot on the national top 20 suburbs list with a rent price gap of 13 per cent for units and an investor score of 87.

The investor score is a composite metric that evaluates multiple factors like rental yield, property affordability, and area vacancy rates. 

“The investor score provides an additional layer to our analysis, assisting investors in identifying not just areas with potential for immediate rental income but also those that promise long-term capital growth,” Mr Henderson said.

He said the research also singled out suburbs such as Stirling and Albany, which both had an investor score of 87 per cent and rent price gaps of 14 and 11 per cent, respectively.

“It’s notable that Western Australia features prominently in the list, positioning the region as an emerging investment hotspot, particularly due to its significant rent gaps,” Mr Henderson said.

Western Australia’s Mira Mar came in fourth on the list, while Queensland’s Gordon Park rounded out the top five.

Source: Rent Gaps: The key to identifying Australia’s top investment suburbs.

The only other Queensland suburb in the top 20 was Tennyson at number 10, with a rent price gap of 12 per cent and an investor score of 84.

Victoria had one suburb in the top 20 – Ringwood North – while NSW also had a single entrant in Merungle Hill.

Hello Haus Head of Research Sam Powell said Western Australia and Queensland’s population growth rates boded well for property hotspots.

“The ABS’s latest Net Interstate Migration analysis reveals that for the 12 months to the end of March 2023, a total of 35,857 people left NSW and Victoria, while the combined populations for Qld and WA grew by 42,191 due to interstate population movements.” 

Mr Powell said savvy property buyers who acted quickly were best placed to profit from the ongoing rush. 

“There has been a material turnaround in both the Qld and WA property markets over the past few months, but we’re convinced there are more capital gains to come,” he said.

“In the past three months, Brisbane housing saw over four per cent gain in value, while Perth enjoyed approximately three per cent according to CoreLogic. 

“The big shift both north and west is unsurprising. Qld and WA have relatively affordable real estate, and both offer exceptional lifestyle appeal, plus comprehensive facilities and infrastructure. 

“Their prospects look great economically as well. The 2032 Olympics will put Queensland on the world stage, and a resurgence in commodity prices as global economies recover bodes well for WA in the long term too.”

Mr Powell said in Queensland, the suburbs to watch were Oxley, Boondall, Fitzgibbon, Churchill and Vincent.

“Positioned 11 kilometres from Brisbane’s CBD, Oxley has a median house price of $746,000 and a healthy median yield of 4.15 per cent, which is rare for houses so close to the city,” he said.

“Oxley will be a net beneficiary of price growth over the coming years. Also, property owners comprise 67 per cent of households and Days On the Market is an impressive 28 days.” 

In Western Australia, Mr Powell said Gosnells, Girrawheen, Mirrabooka, Caversham and Bellajura were potential hotspots.

“Positioned 20 kilometres from Perth’s CBD, and with a median house price of $405,000. Gosnells also has a median yield of 5.78 per cent, which is a very healthy cash flow for the region,” he said.

“Gosnells has the hallmarks of a growth suburb. Owner-occupiers make up 64 per cent of all households and Days On Market is just 15 days. 

“Great public transport options, comprehensive services and facilities along with the natural beauty of the area make Gosnells a highly attractive proposition for new residents.” 

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Kylie Dulhunty

Kylie Dulhunty is the Editor at Elite Agent.