Australian Property Investors and Australia’s Population Surge.

It appears official – Australia’s government wants Australia to grow to a total population of around 35 million by 2049. Not exactly huge, compared to many other countries – but a little scary for some Australian’s who will tell you straight faced the country is running out of resources to support the 20 odd million people it has now. I say they need to get out more. And Australian property investors should take note.

The reality is that Australia really does need to populate or perish. Most of its population lives on the eastern sea board. Most of the north is empty – just north of which, in fact a leaky boat ride away, is Indonesia. Indonesia hasa population of  230 million spread over 1.9 million square kilometres that’s a population density of nearly 120 people/square kilometer. Australia’s average population density is 2.8 people/square kilometer – in fact in most of the north its a lot less than 1 person per a square kilometer. But there is a lack of water you say – well actually there isn’t – not in the North the tropical client is the same one which supports all those millions in Indonesia. The South East of Australia is in drought – not the north.

During the early days of World War 2, Australian military planners famously drew a line on the map roughly from Brisbane to Adelaide and declared everything to the north of it indefensible. Nothing much has changed in the following 60 years.

The Undeveloped Kimberly, Northern Australia

So what will the future of Australia look like and what will it mean to Australian property investors? Well this is where it gets harder to predict. The conventional wisdom is that most growth will occur in the big four cities: Perth, Melbourne, Sydney, Brisbane and that we need to live in higher density housing to make it practical. But Australians don’t like living in small flats – they keep on buying 4×2 “starter” homes which could house an entire tribe of Indonesians – for a couple. Australians like space, outdoor living, and sporting facilities. I don’t think the spread of suburbs is going to stop anytime soon. In addition concentrating even more people primarily in the South East will do nothing much for the defence – or even sensible use of – the majority of the country.

I’d like to see some serious development occur in the North West and North. Workers from the Argyle mine are flown from Perth – a flight so long it requires a jet – yet the local town should be a paradise featuring a year round summer, abundant natural fruit and vegetables and unlimited supplies of water. Of course there is a slight crime problem – maybe the local government would actually have to do something for the seriously disenfranchised local population?  The local dysfunctional governments, including the Northern Territory’s one would have to be revamped, or replaced. It would all be quite difficult to do – but it would be a sustainable solution.

If you are an idealist invest in northern Australia property – if you are a pragmatist – then overpriced, over-large, MacMansions 30km from the CBD aren’t going out of fashion anytime soon – regardless of what the urban planners would like you to believe!