Dispelling the population growth myth

“There is nothing more complex on the planet, other than finding a cure to cancer, than property markets.”

“It is not as simple as taking a population figure and extracting the number of dwellings, and X minus Y is Z,” Mr Pressley said.

Mr Pressley explained that investors cannot look at property the way they would other assets as property is not “homogeneous like a lump of coal or a barrel of oil”.

Instead, the property guru said, while it might be important, it does not make the top 10 influences on prices for the property market.

“I have never said property growth is not important. But as a property investor, you are making arguably the most important decision of your financial life, and if you focus on population growth, you have no chance of making the best decision possible,” Mr Pressley said.

To demonstrate population growth, Mr Pressley highlighted the best-performing growth area in Australia, showing it had very little do with population changes.

“Over the last 20 years, the best-performing property market in all of Australia is Byron. It is Australia’s 73rd largest city from population size. So, clearly, population size is not the driver of price growth.

“It’s annual change in median price of 9.3 per cent is streaks ahead of every capital city, yet its population growth rate over the same 20 years is below the national average,” Mr Pressley stated.

He also explained that the median house price growths in both Alice Springs and the Gold Coast have the same growth rate in terms of property value, yet one city population has grown and the other has decreased.

What drives property growth?

Mr Pressley previously told listeners of The Smart Property Investment Show that the top 10 factors for property growth are: exchange rates, lifestyle, housing affordability, consumer confidence, wage growth, key industries, state governments, job creation, construction industry and credit policy.

To read Mr Pressley’s full thoughts, click here.