The next baby boom has kicked off and more accommodation will be needed. Hooray!

Australia is in the midst of one of its biggest baby booms ever. 293,600 babies were born last year, up by 11,400 since 2007.

Women between 30 and 34 are leading the way, with 128 babies being born in this age group for every 1000 women. We clearly recall ex-treasurer Peter Costello urging us all to have “One for Mum, one for dad, and one for the country”. It seems we have taken him at his word.

Aside from the fact that more people means the need for more homes, I remember reading that the average cost of raising a child through to 18 was about half a million dollars. I tried to multiply this by 293,600 to gauge the economic impact of even one year’s supply of new babies, but my calculator broke while trying to crunch the numbers.

The good news is that more babies means the need for more accommodation. This means that there is increasing demand for houses and units and, given that the government supplies very little of what is required, it leaves investors to play a social role and provide the rental accommodation needed. At a profit, and with tax incentives built in.

There are many countries where the population is actually declining. Japan and a number of European countries are examples. In Australia, however, our surging population gives good reason for savvy investors to get engaged in the provision of what Australians need the most: more housing.

Whether we agree with the government on future population growth or not, it is clear that we are headed for a major increase in numbers. We need to recognise this fact in terms of what it means for accommodation demand, and then act on this knowledge by investing in rental property.

Those who do so will be sitting pretty in 10 to 15 years’ time, when house prices and rentals will be double or more what they are today.

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