Population Growth Spurs Property Markets

Posted on 31/12/2017  
Population Growth Spurs Property Markets

Victoria is the population growth king of Australia. In the last seven years, the state’s growth rate has surged upwards to be well above Australia’s rate of growth.

Queensland is the national leader on net gains from interstate migration, but Victoria is the overall population growth leader, largely through major gains from overseas migration.

The state’s population gains have been a key catalyst to the real estate boom in Melbourne in recent years.

Victoria is attracting an average of 400 new residents each day, double the number of the previous decade, with most of them flowing into Melbourne.

According to demographics website id.com.au, this means Victoria is the fastest-growing state for the third year in a row, with the highest growth in both numerical and percentage terms.

“While it’s becoming the norm now, you have to go back to the 1880s to find the last time Victoria was the fastest-growing state for three consecutive years,” says id.com.au.

Northern Territory’s population barely moved. Western Australia, while growing at 0.8%, showed less than one-quarter of the growth it did in 2013 when it was adding close to 80,000 people per year. Tasmania is now growing almost as fast as Western Australia.

The new figures on Australia’s population come from a one-year update from the ABS. “This is a quarterly publication, but the December release is a bit special as it gives us an estimate of population change in the year since the 2016 Census,” says id.com.au.

Highlights from the latest ABS figures include these:

  • Net overseas migration is at the highest levels since 2009
  • Interstate migration to Queensland has picked up again after a few slow years
  • In a reversal of recent trends, Tasmania has recorded a net interstate migration gain

At 30 June 2017, Australia’s population was just under 24.6 million, with growth of 388,000 over the previous year – a 1.6% increase. This growth was up a bit on the last three years (it had been fairly stable at about 350,000 per year), mainly due to an increase in overseas migration.

Nationally, the “natural increase” (more births than deaths) stood at 142,600 – or 37% of total growth. This was down a bit on the previous year, as the birth rate slowed.

“But Net Overseas Migration is particularly high. From a peak of 300,000 in 2009, in the last few years it’s been steady at around 180,000 to 190,000 per year. But in FY2017 it rose to 245,400 – the highest since that year of 2009, when we were talking about ‘Big Australia’.”

The id.com.au analysis notes that there has been a real shift in the location of this overseas migration back into New South Wales and Victoria. NSW recorded in FY2017 the highest level of overseas migration in the past 50 years, at 98,570 people - or over 40% of all net migration.

Again, this significant inflow of overseas people – and money – has been a factor in Sydney’s recent economic uplift and property boom.

Victoria’s Net Overseas Migration was slightly lower, but still very strong, at 86,900.

“Since we know around 90% of migrants in these states go into Sydney and Melbourne respectively, we can say that Sydney and Melbourne account for over 70% of overseas migration into Australia,” says id.com.au.

Western Australia’s share - which was high at 40,000 to 50,000 per year from 2011 to 2013, has fallen right back. In FY2017 only 13,100 new migrants came to WA. South Australia continues to get consistently around 10,000 per year, while Queensland is up strongly to 31,100.

“Interstate migration is where it starts to get really interesting,” says id.com.au. “This measures which states people are moving into, and which they’re moving away from, showing to a large extent the fortunes of different parts of Australia’s economy.”

A few years ago, Western Australia was attracting lots of interstate migrants in the mining boom. However, in FY2017 it showed a net loss of 11,722 migrants who moved interstate (i.e. 11,722 more moved out of WA than moved in during the year).

The largest net interstate loss remains NSW, at 14,859 people, but this is not unusual – as the oldest state, NSW usually records a loss to others states, particularly Queensland, and more recently Victoria.

Victoria recorded a new high of 17,182 net interstate migrants in 2016-17 – numbers not seen in Victoria since the gold rush. Combined with overseas migration, this means that movement into Victoria accounts for 73% of all population growth in that state – the highest of any state or territory.

However, it wasn’t the highest interstate migration, with Queensland picking up again after a few slow years, and attracting 17,426 interstate migrants.

Another interesting story is Tasmania. Typically the Apple Isle loses population interstate, and this has been the case in most years for at least the last decade. But in 2016-17, Tasmania recorded positive interstate migration, totalling 741 people.

“This may not sound like much, but it reverses years of losses. There has been a lot of talk about Hobart’s housing market and it may be that people are seeing Tasmania as a more affordable option compared to Sydney and Melbourne.”

The ACT is also recording gains in interstate migration for the first time in a while.

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