Regional areas are sort of misunderstood in many respects for investing but we’re seeing a few towns in New South Wales with significant potential. A combination of population increase, good growth within the property market and affordable markets for investors to be getting into. But where in regional NSW are people going to move to?
New South Wales population forecast to hit 10 million
The government has forecast that the New South Wales population is going to hit 10 million by 2041.
This is an increase of 1.9 million people. And 600,000 of those are going to live or move into regional New South Wales.
Obviously to cover that increase, we’re going to need a lot more houses otherwise demand is going to outpace supply and prices are going to skyrocket.
What does that actually mean for people wanting to invest in property and does the infrastructure and planning allow for it? As we talked about recently, the government is falling well short of its target to build new homes.
Population growth breakdown and migration trends
New South Wales is going to go up by 1.97 million from 2021 to 2041 which is an annual average growth of 1.1%. Net overseas migration will contribute to 1.7 mil of these people.
On the other hand, New South Wales will lose around 400,000 people due to interstate migration likely due to affordability.
There will also be a natural increase of around 700,000 due to births.
Ageing population and property market impact
So one thing to note is that in 2021, 17.2% of people in New South Wales were aged over 65. That is predicted to grow up to 21% by 2041.
So the population in New South Wales is ageing and that does have an effect on the property market as well.
Although that’s only a 3 or 4% increase in that demographic, that demographic will be concentrated. A lot of them will be moving out of Sydney and the more metropolitan areas and they’re going to these regional towns. And when you think about it from a buyer’s perspective, a lot of those people are downsizing and buying in more affordable markets.
Most importantly, they’re paying cash and they aren’t dictated by interest rates.
Growth centres in regional NSW
We’re going to throw some numbers out there. The first one is the major growth centres:
- Wagga Wagga is predicted to go up by 16,300
- Albury: 15,500 growth
- Dubbo: 10,800 growth
- Tamworth: 9,700 growth
- Bathurst: 9,100 growth
To put that into context, Wagga Wagga is projected to grow to 81,000 people. At the moment, the population is sitting around 70,000 people. So even though 10,800 people doesn’t sound like a huge amount, that’s around 14%of the current population.
You’re increasing that population by a significant amount, and if the dwellings aren’t there to support it, obviously that’s just simple supply and demand metrics. But one thing to note here is although Wagga Wagga is the top in terms of population doesn’t necessarily mean it’s going to be the top in terms of growth as well.
Wagga’s typical purchase price is around $800,000, whereas a more affordable market might be around $650,000. Property value growth isn’t going to be reflective purely on that population basis.
Coastal hotspots attracting retirees and sea changers
A lot of retirees like to downsize to a smaller coastal town with a slower pace of life.
The biggest growth is expected in the Port Macquarie region which is expecting 15,800. Other high growth areas include:
- Coffs Harbour: 15,400
- Tweed: 15,300
- Ballina: 9,700
- Eurobodalla: 8,800
And a high population here is sea changers or retirees moving from Sydney and Brisbane.
Tree change towns and inland growth areas
Some people will be moving a little bit further out. Orange is predicted to have an increase of 10,200. Goulburn is 6,300, Armidale is 5,200.
So, a little bit less, but still, you know, if there’s no increase in supply of dwellings there, there’s obviously going to be pressure on that market. , and a lot of people, you know, wouldn’t suspect, but there is actually infrastructure within these areas as well. We haven’t listed in here. This is purely population. but for example there’s a a new development going on for Ba’athas hospital. So in terms of industry within that local economy there is investment in these areas as well.
Final thoughts on regional population growth to 2041
So that’s our regional wrap-up for the population growth estimates for the next 20 years.
Wrapping up, one thing to note is that within these regional areas, it’s noted in the report that most of the population are going to the city centre itself or the surrounding suburbs. The hinterlands of all of these areas are going to have decreasing populations.
As a result, you’re likely selling your properties for less as well. If you’re going to buy in these areas, just be mindful that all of the people are going to want to live near the amenities in those locations. It’s probably best buying as close to town as you possibly can.
Try to avoid these mega estates that some of these developers are going to start rolling out in those areas because of these numbers. They’re going to build these huge estates on the outskirts of town which is a lot of supply of a product that not many people want.