Australia’s property market is a constant topic of conversation, often fueled by the seemingly straightforward idea that more people mean higher property prices. It’s a logical assumption: a growing population needs more homes, which should, in turn, drive up demand and values. However, as seasoned property expert John Hanna often emphasizes, the reality is far more nuanced. While population growth undeniably plays a role, it’s not the sole, nor always the primary, determinant of property booms. This blog post, drawing insights from John Hanna’s perspective and official Australian data, will explore the multifaceted factors that truly shape the nation’s property landscape, revealing why a simple increase in population doesn’t always translate into a booming market.o.
The Illusion of Simple Supply and Demand: More Than Just Heads in Beds
While a rising population does increase theneed for housing, this doesn’t automatically equate to aboom in property values. The market is influenced by a complex interplay of factors, including affordability, interest rates, lending policies, government incentives, and perhaps most critically, thetype of housing being demanded versus thetype being supplied.
For instance, the Australian Bureau of Statistics (ABS) provides detailed population data [1]. While Australia’s population reached 27,400,013 people at 31 December 2024, with an annual growth of 1.7% [1], this growth doesn’t always translate evenly across all housing segments or geographical locations. A significant portion of population growth might be concentrated in specific demographics (e.g., young professionals, families, retirees) with varying housing preferences and purchasing power.
Furthermore, the supply side of the equation is not simply about building more houses. It involves zoning regulations, land availability, construction costs, and the speed at which new dwellings can be brought to market. As noted by McCrindle, property price rises generally come from housing demand exceeding supply, but this is not simply a factor of population increase, but often an inefficiency in the supply chain [2].
Economic Undercurrents and Policy Impacts: The Unseen Hands
Property markets are highly sensitive to economic conditions. Interest rates, for example, directly impact borrowing capacity and mortgage affordability. When interest rates rise, as they have in recent times, the cost of servicing a mortgage increases, which can cool demand even with a growing population. Conversely, lower interest rates can stimulate demand and push prices up.
Government policies also play a pivotal role. First-home buyer grants, negative gearing, capital gains tax, and immigration policies all have significant impacts on the property market. For instance, changes in immigration intake can directly affect population growth, but thecomposition of that intake (e.g., skilled migrants vs. students) can influence demand for different types of housing. The KPMG Residential Property Market Outlook highlights how population projections are adopted from budget papers, indicating the government’s influence on future housing demand [3].
Moreover, the availability of credit and lending standards set by financial institutions can either fuel or constrain the market. Tighter lending criteria, even in a high-demand environment, can limit who can purchase property, thereby dampening price growth. These are the ‘unseen hands’ that often have a more immediate and profound impact on property values than raw population numbers alone.
A Holistic View for Informed Decisions
As John Hanna consistently advocates, understanding the Australian property market requires a holistic and nuanced perspective. Relying solely on population growth as an indicator for property booms is an oversimplification that can lead to misguided decisions. While population growth contributes to underlying demand, its impact is heavily mediated by economic conditions, government policies, housing supply dynamics, affordability, and investor sentiment.
For anyone looking to navigate the complexities of the Australian property market, whether as a homeowner, investor, or policymaker, it is crucial to consider these interconnected factors. A true understanding of the market goes beyond simple correlations and delves into the intricate web of influences that truly drive property values. As John Hanna might say, ‘Property rewards the bold, not the perfect. You just gotta get in (the market),’ but getting in wisely means understanding the full picture, not just one piece of the puzzle.
References
[1] Australian Bureau of Statistics. (2024).Population. Retrieved fromhttps://www.abs.gov.au/statistics/people/population
[2] McCrindle. (n.d.).Exploring the link between population growth and property prices. Retrieved fromhttps://mccrindle.com.au/article/topic/demographics/exploring-the-link-between-population-growth-and-property-prices/
[3] KPMG. (2025).Residential Property Market Outlook. Retrieved fromhttps://assets.kpmg.com/content/dam/kpmg/au/pdf/2025/kpmg-residential-property-market-outlook-january-25.pdf
[4] Australian Institute of Health and Welfare. (2025).Home ownership and housing tenure. Retrieved fromhttps://www.aihw.gov.au/reports/australias-welfare/home-ownership-and-housing-tenure