Population Is Rising. Why Aren’t Prices Always Following?

Many investors believe that when population grows, prices will automatically follow. In reality, it’s not that simple.

At Foresight, we look at how different factors work together, not in isolation. Population growth is important, but it’s only part of the picture.

The state-by-state picture

In Western Australia, many areas sit in the strong zone where both population and prices are rising, especially around Perth. This suggests that returning population has already translated into price pressure.

In Queensland, the picture is more mixed. Areas like Brisbane, Logan, and Ipswich are performing well, while some locations still show population growth happening before price growth.

In Victoria, many regions have steady population growth, but prices have been more moderate. Areas such as Melton, Wyndham, and Casey appear to be in a phase where demand is building.

In New South Wales, there is less consistency, some areas show price growth, but population growth is not as strong. Tasmania remains weaker overall.

One important insight

The number of people matters more than the growth rate. A large number of new residents creates real demand for housing. Even if growth is not the highest, the impact can still be strong.

But demand alone does not determine prices, supply matters just as much. For example, parts of Melbourne have seen solid population growth, but price growth has been slower, due to higher supply and policy settings that affect investor demand.

This leads to a simple principle: prices move when demand exceeds supply, not just when demand increases.

A practical way to approach this

Avoid relying on one metric. Look at how population, supply, and local conditions come together. The best opportunities are often where demand is building, but prices have not fully reacted yet.

In our work, this is how we assess locations, focusing on areas where the fundamentals are strengthening, not where growth has already happened.