Population growth: the number that drives everything

Population growth drives almost everything. It determines how many customers a business can attract, how many businesses an area can support, and how much housing is required.

When it comes to property, population growth is one of the most powerful drivers of rental demand and long-term valuation growth.

Earlier this month, the Australian Bureau of Statistics (ABS) released its quarterly population data. For investors willing to make sense of it, the information provides a significant advantage.

Fortunately, I've done the work for you, and some of the key insights are fascinating.

Australia’s population grew by 392,700 in the 12 months to 31 March 2026, an increase of 1.4 per cent. This was slightly lower than the 420,000 added the previous year, and well below the extraordinary growth of the 600,000 or so people recorded in the years immediately following the reopening of international borders post pandemic.

Importantly, that growth has now largely returned to pre-Covid levels, which averaged around 370,000 people annually in the five years pre-pandemic.

The natural increase (the difference between births and deaths) contributed just over 100,000 people and remained broadly consistent in recent years.

Interestingly enough though, births increased in New South Wales and Queensland, yet declined in Victoria, South Australia and Western Australia.

This being the case, it will be worth watching whether this develops into a meaningful trend.

Victoria also recorded its first positive interstate migration result since pre-Covid. After several years of people leaving the state, improving relative affordability may be drawing residents back from more expensive markets.

Meanwhile, interstate migration has slowed in Queensland, WA and SA, all states that have experienced strong property price growth in recent years.

The most significant shift appears to be in overseas migration. NSW and Victoria have largely returned to their pre-Covid migration patterns, while SA’s overseas migration is running at around 50 per cent above pre-Covid averages.

Queensland’s is approximately double, while WA is experiencing almost four times the level of overseas migration it recorded pre-pandemic.

So, what does all this mean for investors, I hear you ask.

More people, less risk

Firstly, 97 per cent of Australians live in the five largest states: NSW, Queensland, Victoria, SA and WA. Most of that growth occurs in the capital cities.

From a risk-management perspective, there is little reason to chase smaller regional markets when the strongest population growth is concentrated in the nation’s largest economic centres.

Population growth is one of the simplest and most effective ways to reduce investment risk.

Right now, Victoria, Queensland and WA stand out as the key opportunity markets. They are the three fastest-growing states, with annual population growth rates of 1.6 per cent, 1.6 per cent and 2.1 per cent respectively.

Victoria is compelling because of its relative affordability and consistent ability to attract large numbers of new residents year after year.

The data shows that its population growth exceeded that of any other state, adding around 12,000 more people than the next highest performer.

Queensland and WA are attractive for different reasons. Both are benefiting from strong growth across every migration channel: natural increase, interstate migration and rapidly rising overseas migration.

They are also major employment hubs. Queensland continues to benefit from its resources sector and enormous infrastructure pipeline associated with the 2032 Olympics.

WA remains a powerhouse when it comes to mining investment and it’s well positioned to benefit from the global energy transition.

Of course, identifying the right state is only the first step.

The real opportunity comes from going one layer deeper and identifying the specific suburbs attracting the fastest population growth.

Then you need to overlay housing supply and construction activity to determine where demand is growing faster than new homes are being delivered. That’s where genuine undersupply emerges, and where some of the strongest investment opportunities are often found.

The numbers tell a clear story. Population growth remains one of the most reliable leading indicators of future housing demand, and right now Victoria, Queensland and Western Australia are leading the pack.

There is only one truth in property investing: follow the numbers, because few numbers matter more than these.