Stalling population growth will lead to further easing of housing demand
NSW attracted the largest number of new residents at 110,923 over the period followed by Victoria with 107,916 new residents, Queensland with 79,706, and Western Australia with 71,301.
An important indicator for the housing market, population growth statistics represent a proxy for housing demand. More residents imply more people who require accommodation.
At its peak, Australia’s population reached a record high in 2008 with an annual growth rate of 2.2%. Since then, population growth has fallen away sharply and dropped to its lowest point of 1.4% for the year end to March 2011. In 2012, population rose to reach a new high point of 1.8%.
ABS data indicates that the rate of population growth has been slipping since mid-last year, slowing to an annual growth rate of 1.7%. Despite a slowdown, population growth remains well above average.
Source: RP Data, ABS
The level of natural increase, that is births minus deaths, was 8.6% higher than the ten year average and 19.1% higher than their 30-years average over the 2013 calendar year. In addition, net overseas migration was tracking substantially higher than average at 16.7% above the 10 year average and 78.6% above the 30-years average.
Across the states, there were some diverse population growth trends where in raw numbers; NSW continues to attract the largest number of new residents, at 110,923 over the 2013 calendar year. Victoria showed the second largest number of new residents (107,916) followed by Queensland (79,706) then Western Australia (71,301).
According to the ABS, net overseas migration is the largest contributor to population growth. Across each of the states except for Tasmania and the Australian Capital Territory, natural increase outweighs net overseas migration numbers.
New South Wales holds the largest number of overseas migrants at 71,446 net migrants over the calendar year, followed by Victoria which recorded 62,337 overseas migrants.
Both NSW and Victoria are the two states showing a healthy upwards trend in overseas migration. Net overseas migrants into WA were the third highest of any state at 45,401, however, the ABS data shows a substantial decline over the year with overseas migrant numbers down 19.8% compared with the 2012 calendar year. A similar trend is evident in the other mining state, Queensland, where overseas migration is down 19.1% over the year.
Victoria attracted the largest number of net interstate migrants for the second consecutive quarter; historically it has been Queensland and more recently Western Australia. A slowdown in the resources sector is the likely cause of stymied interstate migration into both of these states.
With population growth winding down we can expect some further easing of housing demand, both from a sales and a rental perspective. The slowdown seems to be most pronounced in the mining states of WA and Qld where population growth conditions have previously been the strongest.
Source: RP Data, ABS