Migration and population growth are not necessarily to blame for Australia’s housing affordability crisis, according to a new analysis by Propertyology. It says it is more a result of a “perfect storm” of factors including labour and material shortages, higher interest rates and increased investor selling, which has resulted in a shortage of supply.

Propertyology head of research Simon Pressley says people think population growth is the most dominant factor influencing the property market but it only plays a small role. Using data from the Australian Bureau of Statistics, Propertyology ranked the population growth of 120 cities and municipalities with more than 20,000 residents over the 20 years to June 2023. It compared that against real estate capital growth rates and determined there was no direct correlation between the two metrics.

Pressley says in Sydney there have been significant capital gains over the past two decades but the city ranked 43rd on the list of Australia’s fastest-growing locations during the same period.
The top growth location was the West Australia coastal city of Mandurah, where the population grew by 91%. “For 14 years of that period (of 20 years) it was Australia’s fastest growing population yet the median house price was unchanged,” he says. “Similarly, Victoria’s Surf Coast saw 85% population growth, West Australia’s Busselton 81%, Queensland’s Sunshine Coast 70%, and Mount Barker in South Australia, 68%. Yet all displayed underwhelming property price growth during the period.”

CoreLogic research says migration is more likely to increase rents than purchase prices. An example is Carlton in Melbourne with an 18.4% increase in its population with its rents up by 18% and sale prices down by 10.9% during the same period.