Population growth key driver of housing demand

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Strong interstate migration and overseas immigration are major drivers of housing demand, according to CoreLogic.

In 2016, Australia’s population increased by 1.6% over the year, making it the largest annual increase in the national population since the 12 months to June 2014, according to the latest demographic data from the Australian Bureau of Statistics (ABS).

CoreLogic analysed the ABS’ demographic data in its latest CoreLogic Property Pulse report. In raw numbers, 372,805 more residents called Australia home over the year and represented the largest increase in the national population since March 2014. Net overseas migration and interstate migration remained the key drivers for national population growth over the year, and was recorded at 208,953 persons. This accounted for 56% of the national increase in population.

Meanwhile, the ABS’ monthly overseas and arrivals data showed that over the 2016 calendar year, the largest sources of permanent arrivals to the country were from India (22,180 persons), China (18,050 persons), and New Zealand (11,740 persons).

“While interstate migration nets to zero at a national level, it plays an important component for population growth across the individual states and territories. In particular, interstate migration and overseas immigration have been the key drivers of housing demand,” said Cameron Kusher, head of research at CoreLogic. “Whereas natural increase removes older people and adds younger people, interstate migration and overseas immigration brings a new person or family to a region of the country and these people need to be housed.”

Combined, New South Wales (40.6%) and Victoria (35.4%) accounted for 76% of net overseas migration nationally last year. If Queensland is added (11%), only 12.9% of net overseas migration flowed to areas outside of the three most populous states.

Four states and territories—Victoria, Queensland, Tasmania, and the ACT—recorded positive net interstate migration throughout 2016, with the remaining four states and territories witnessing a net loss from interstate migration.

“Interstate migration into Vic is at an historic high level and in Qld there has been a substantial rebound recently; however, it remains dramatically lower than its historic high,” CoreLogic said.

“Migration trends show a clear preference for overseas migrants to settle in either NSW or Vic, while interstate migrants appear to be turning their backs on NSW and WA and choosing to move to Vic and Qld,” Kusher said. “NSW is likely to be less attractive for interstate migrants due to the high housing costs, while the ongoing weak housing and economic conditions are the main deterrents in WA.”

Victoria is particularly attractive to migrants because wages are similar to those found in New South Wales; however, housing is much cheaper in Victoria, while the economy is similarly robust, according to Kusher. “[Queensland] appears to be growing in popularity again largely due to the fact that housing is much cheaper than NSW and Vic, and lifestyle housing markets in South-East Qld seem to be seeing resurgent popularity,” he said.


Related stories:
Growth In Net Overseas Migration Fuels Property Demand
Regional Markets Seeing Value Growth – Report

 

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