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deposit to 20 per cent, in my opinion the availability of finance is
what matters,” he says.
Christopher agrees and says confidence and lending work
“It’s the cost of money (in relation to interest rates) and getting
access to credit that’s critical,” he says.
“Look at the loan-to-value ratios the banks are offering.
They’ve been loosening up since 2010 and credit has been
Commsec chief economist James Craig adds the Reserve Bank
of Australia recently reported the media coverage of job losses in
relation to the car industry was overdone.
“The RBA was more concerned about people’s confidence
levels and how it affects their ability to spend and invest,”
“You can tick all the boxes in terms of having a deposit and
serviceability but if you’re not confident about the transaction,
about your own job prospects and where the economy is going
or interest rates, that can hold you back.
“It’s that gut feeling people have. When you think about it,
it’s common for all humans and it’s the heart ruling mind-type
8 POPULATION GROWTH
Lindeman always looks for population growth when
it comes to suburbs with explosion potential.
More people wanting to live in an area obviously
translates to population growth, he says. It could
also mean there are more jobs in the area, or better
infrastructure and amenities for families.
A rapid population increase then leads to
competition for housing, which pushes up rental prices and
Lomas adds it’s not just about the population increasing, it
should also be growing faster than the national average.
“If population grows faster in an area, there must be an
underlying reason,” she says.
“Usually it’s because the area has a lot going for it and inward
migration is being attracted.
“Undersupply in an area with a growing population will always
mean that there’s pressure placed on the available supply. When
demand exceeds supply, prices will always rise.”
On the other hand, Koulizos points out some areas can have a
sudden population expansion because a developer might have
built a lot of new stock in a new area. Investors also need to be
careful that the population growth isn’t short-term. For example,
some mining areas have a huge surge in population but the
workers can leave just as fast as they arrive.
However, Koulizos points out more blue-chip areas have
limited land supply and so aren’t likely to get a huge increase
in population growth. Instead, that limited supply will be more
in demand, forcing people to compete for property. That’s why
population growth isn’t always paramount, he says.
Craig adds one of the key factors when it comes to supply
versus demand is population growth.
“It’s also the flow of the population as well,” he says.
“More and more of the gen Y group are looking to live closer
to the city and that’s something harder to get a handle on.
The movement of the population happens over shorter periods
of time than the figures like the Census show (once every
9 A CHANGING SUBURB
Is there a new industry in the area or
Hegney says ugly duckling suburbs often
outperform over the long-term.
“The ripple effect is very much alive and well. It
tends to emanate from most inner city areas and
grow outwards,” he says.
“If you want the next hotspot in the short term, just look at the
last one and buy next door.”
Koulizos adds character homes are loved by those in
Sydney, Brisbane and Adelaide, ranging from the typical art
deco and terrace home to the Queenslander property or the
“An area which has a significant proportion of those is going to
be more attractive to people,” Koulizos says.
“The other bonus is that if they find the area so attractive that
they don’t want to shift out, when it comes time to looking for
a bigger dwelling, they’re happy to renovate and extend. That’s
good for the whole area.”
KPMG partner and demographer Bernard Salt says a suburb
with growth is where there’s a fundamental transition in the way
the suburb is viewed.
“It’s the suburb that goes from working class to middle class
and a yuppie area,” he says.
“It’s exactly the transition everyone is looking for. It’s working
class prices to those a rich, yuppie couple is prepared to pay a
æIf population grows faster in an area, there must be an
underlying reason, usually it’s because the area has a lot
going for it.Æ Margaret Lomas
Murarrie is undergoing gentrification in Brisbane.
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