Where You Live Will Get More Expensive. The Wealth Through Property Series
What we must understand is that the average house price of a suburb where you live or where you grew up is actually going to grow much faster than inflation. Why? Because as the population grows so will the number of higher, middle and lower-income earning people. What happens is that the suburbs that were once low socio-economic or working class start to become middle class and upper class as the population grows. Those higher-income earners will outbid and outprice the lower-income earners pushing them out of that suburb.
There are many examples of this movement in every capital city of Australia. Suburbs with terraced homes are a great example. Terraced homes were introduced to Australia between the 1850s and 1890s as affordable housing. During this time there was an accommodation crisis, started by the gold rushes beginning in the 1850s and ended with the depression in the early 1890s. With many migrants coming to Australia, there was high demand for affordable accommodation and thus the concept of terraced homes was introduced.
A terraced home is usually a property that stands on its own block of land but shares common walls with neighbouring properties on either side and usually has a laneway at the back where they used to have their outhouses and toilets. Nowadays, these terraced homes, originally created as affordable housing, are multimillion-dollar properties. They have amazing interior architecture and are heritage-listed so they cannot be modified. If you go back 100 years, you would find that those suburbs were very rough. There was a lot of crime and most residents were hard-working labourers like coal miners, blacksmiths, and the like. Jump forward to today
and you’re more likely to find high-powered CEOs, CFOs, barristers and doctors living in these homes.
This should remind you of the importance of getting into the market and staying in the market because where you live is not going to get any cheaper. If it’s important to you that you keep your family in a particular area, then you absolutely must put down your roots and secure a piece of real estate there as soon as you possibly can.
Bear in mind that they are not making any more of Australia. There’s always going to be the same amount of land, but there will be more people. In the last 50 years alone the Australian
population has doubled (1972-2022). The projected population in the next 50 years (2072) is expected to be around 35 million.
Figure: Australian population growth
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