The Impact of Population Trends on Rental Demand and Rent Roll Growth
- Rent Roll Calculator
- Nov 13, 2024
- 3 min read
Updated: Nov 30, 2024
As Australian cities evolve, so do the trends shaping the real estate market. One of the most significant factors influencing rental demand and the growth of rent rolls is population movement, including urbanisation, regional migration, and overall population growth.
For real estate business owners, understanding these shifts can reveal valuable growth opportunities in high-demand areas. In this post, we’ll explore how population trends impact rental demand and provide insights on how to position your agency for success.
1. Urbanisation: The Drive Towards City Living
Urbanisation has been a defining trend for decades as Australians gravitate towards larger cities for job opportunities, lifestyle amenities, and educational options. While recent years have seen a renewed interest in regional areas due to flexible work arrangements, major cities continue to attract young professionals and international migrants. This steady flow of new residents contributes to rental demand in metropolitan areas and presents opportunities for agencies focused on investing in and growing urban rent rolls.
Agencies operating in capitals such as Sydney, Melbourne, and Brisbane are well-positioned to benefit from this trend, as demand for rental properties remains resilient.
2. Regional Migration: A Growing Demand Beyond the Cities
The shift toward regional living accelerated significantly during the pandemic, as people sought more space and a lower cost of living. Many are still choosing to settle in regional hubs close to major cities, where they can enjoy both community life and access to city amenities. This trend has expanded rental demand in areas that were once overlooked by investors and agencies.
For agencies targeting regional markets, understanding these localised demands is essential. Analysing population increases in specific regional areas can highlight which suburbs or towns are experiencing rental market growth. By leveraging tools such as our own Rent Roll Calculator, agencies can assess the value of rent rolls in these markets.
3. Demographic Trends: How Age and Lifestyle Influence Rental Demand
Australia’s population demographics are constantly shifting, with trends such as an aging population, the growth of single-person households, and the preferences of younger generations for renting over buying. Younger people, including millennials and Gen Z, often favour renting due to lifestyle flexibility, while retirees may seek rentals in amenity-rich locations to downsize or transition into retirement.
These demographic factors can influence rental demand across different areas. Agencies that understand the preferences of these demographic groups can tailor their property offerings accordingly, capturing a larger market share. For example, agencies in popular retirement locations may focus on secure, low-maintenance properties that appeal to retirees, while agencies in inner-city areas may target younger professionals.
4. International Migration: A Key Driver of Rental Demand
Australia’s international migration policy significantly impacts rental demand, particularly in metro areas where international arrivals are most likely to settle. With borders well and truly reopened and skilled migrant intakes increasing, this influx of new residents is expected to contribute substantially to rental demand, especially in student hubs and employment centres.
Real estate businesses focusing on areas with high migration rates can benefit from this trend by aligning their rent roll strategies with these population increases. Tools like Rent Roll Calculator can assist agencies by providing insights into potential current and projected rent roll income and valuation in migration hotspots.
5. Maximising Rent Roll Growth in High-Demand Areas
For agencies aiming to expand their portfolios, staying informed about population trends can guide decisions on where to focus rent roll acquisition or management efforts.
By leveraging these insights and implementing the right tools, real estate business owners can make data-driven decisions to maximise rent roll growth in thriving areas. An understanding of the factors driving rental demand—be it urbanisation, regional migration, or demographic shifts—can empower agencies to stay competitive and responsive.
