Immigrants still love Sydney and Melbourne, and now in record numbers

Immigrants still love Sydney and Melbourne, and now in record numbers
Immigrants still love Sydney and Melbourne, and now in record numbers
Figures out recently showed Australian employment growth tracking at all-time record levels, with a stunning +420,700 year-on-year increase in employment, including an eye-watering +166,200 increase in New South Wales.

I took a look through those numbers in a bit more detail, including at the state level, here.

Population growth tends to be pro-cyclical, and over the year to September 2017 the annual growth in Australia's estimated resident population picked up to +395,600, for the quickest annual increase since 2013 in absolute terms, if not in percentage terms.

The estimated rate of population increase through net overseas migration is a bit faster than might be implied by the issuance of permanent residency visas, with the growth international students accounting for some of the difference.

I'll take a look below through where and why that's happened in 4 short parts.

Part 1: By natural causes...

As the population grows and ages the number of deaths each year tends to climb steadily, now up to +161,100 over the year to September 2017.

The trends for births are a bit more complicated, and often vary quite significantly around the regions of Australia and by culture.

Generally speaking, we're still having babies, but on average we opt to do it later in life than was the case over the preceding decades.

I'm not a bad case study myself for Australia's population trends, being a capital city immigrant to Sydney that worked in professional services, then mining, then real estate...before relocating to Brisbane, and leaving having children about as late as nature would allow.

I've yet to get divorced.

You might say I'm following the herd, but in fact my plan has been to be ahead of the crowd on all fronts, and indeed with the benefit of hindsight I probably got out of the mining industry a few years too soon (bubbles can have a second wind and run for much longer than you think they will...but you live and learn with these things!).

Anyway, back to the demographic statistics, there was previously a bit of a blip in the births figures - the error was administrative and related to slow record-keeping rather than the number of babies actually popping out - but the backlog now seems to be fixed and total births have stabilised at around +306,500.

Thus, the natural increase in Australia's population over the year to September was +145,500, a bit lower than the +151,500 a year earlier as the number of deaths continued to increase. 
It's hard to predict what will happen here.

Certainly the number of deaths will continue to rise (that's one prediction you can hold me to) and as the Baby Boomer population ages for the past decade I've consistently recommended some exposure to the healthcare sector for that very reason, while there will be a chronic shortage of aged care facilities and, in some locations, retirement living options.

Future births I can't reliably predict - nobody can - but by dicing up the population pyramid I do like to construct the argument that the growth in births will be much stronger than many expect, due to immigration being focused on younger arrivals, and the corresponding explosion in the 25-34 year old cohort.

The births boom will just come a bit later down the track than previous trends might imply, that's all.

Unfortunately more divorces and separations will also ultimately result in an unprecedented spike in demand for inner-suburban apartments and townhomes, but that's all a while away yet.

Part 2: Immigration nation

Australia's permanent migrant intake is capped at around 200,000 per annum, but the overall pace of net overseas migration was faster than this, partly accounted for by international students.

Furthermore, earlier studies by the ABS have found that many Australians migrating overseas 'permanently' or purportedly for the long term end up returning to these shores within a remarkably short space of time, suggesting that for many the grass is not greener elsewhere.

Incidentally, I wrote in 2015 how these 'boomerang departures' would be one factor leading to a population growth rebound, inadvertently dragging me into a quagmire of social media ridicule (in the end I was right, though).

Looking at the net figures, then, we can see that net overseas migration increased by +15.4 per cent over the year to +250,100. 

 The next slide tells its own story: immigrants still love Sydney and Melbourne, and now in record numbers. 

Concerningly for the regional centres of Australia, the Characteristics of Recent Migrants survey showed that not only do migrants uniformly head to the capital cities, they also now overwhelmingly remain there
I know a bit about this, because I'm one of the said migrants, although like many I've made a couple of internal capital city moves since my first arrival in Australia in the 1990s. 
During the mining boom years through until 2012 immigrants also flocked to the resources states. 
I recall Simon Reeve's BBC documentaries revealing to stunned Britons that expat truck drivers in Western Australia were earning salaries that most working class Poms could only dream of, and to rub further salt into their wounds the truckies were living in houses with swimming pools you could actually swim in! 
Although Queensland has experienced something of a rebound, the drawcard for the resources states is not nearly as strong as it used to be, and South Australia has at least half a foot in that camp too. 

Going forward Sydney, Melbourne and south-east Queensland are projected to capture the bulk of population growth.

Perth will now have direct flights to Europe in its favour, but my analysis here previously has shown that in the future almost all of the net growth in the overseas born population will be driven by migrants of Asian origin.

European-born Baby Boomers are set to drop off the perch and more Asian migrants and international students from China and India are dominating the intake (with many expected to become permanent residents later).

This in turn has a strong impact on future demographic pull-factors, including for family visas and future international students.

Part 3: Upping sticks

One of the main trends to watch for me at the moment is internal movements as the two most populous capital cities adjust to the latest influx.

Sydney in particular can be wearisome at times with the delivery of the CBD & South East Light Rail project still seemingly an age away, although testing on the Randwick section is at least now underway.

This is scant consolation, I expect, for the commuting residents of Randwick and Coogee currently experiencing near-unfathomable gridlock on their short 6 to 8km journey to the city, only to discover that when then arrive in the city the key CBD thoroughfares are being dug up there too.

For this reason and others, Queensland has now usurped Victoria as the typical interstate migrant's destination of choice with net inflows hitting a decade high of above +19,000.

About 12,000 of those came from New South Wales on a net basis, with the ratio of Sydney's house prices to those in Brisbane tracking at the highest level we've ever seen at above 2.2. One way or another that ratio will likely close back below 2. 
Although not included here because it would simply be a long, flat, green line on this Y-axis scale, Tasmania is now attracting more than a smattering of interstate migrants at +1,000 net over the year to September.

Net interstate migration away from struggling South Australia is not a new thing, and indeed the ABS figures record that well over 100,000 South Australians have relocated elsewhere on a net basis since the early 1980s.

South Australia now has the slowest population growth of all the states in percentage terms at +0.6 per cent, but it's the composition of demographic change rather than the absolute headcount that should be of most concern.

The present speed of the outflow is somewhat alarming, especially because interstate migration can have an irritating tendency to sap a capital city of its potential best and brightest.

Since the peak of the mining boom in late 2012, South Australia has lost more than -23,000 residents interstate, with many skipping in a south-easterly direction to the brighter lights of Melbourne.

I don't know how that trend gets arrested, but someone needs to have a deep think about it.

Part 4: Totting it up

Totting it all up, then, strength in net interstate migration takes Queensland's population growth all the way back up to +81,300, from a cyclical nadir of below +60,000 in 2015.

Brisbane typically accounts for 60 to 65 per cent of that growth with Queensland being the one Australian state with diverse and thriving regional centres including Gold Coast (which is set to benefit imminently from the 2018 Commonwealth Games) and Caloundra on the Sunshine Coast.

I looked in a bit more detail here at where the main population flows are headed in the Sunshine State.

But even this rate of state population growth growth pales into insignificance next to Victoria (+147,400) and New South Wales (+123,100).  
A significant intercensal difference emerged in the 2016 Census and found that the nadir in population growth in Western Australia was considerably lower than previously believed, partly accounting for the dwelling stock overhang, though population growth is now picking up again and the housing market is rebalancing. 


Western Australia's annual population growth was up to +22,000 or +0.9 per cent.
Finally, the Northern Territory experienced a small population decline in the September 2017 quarter, which is fairly unusual, though not unheard of. 
I've even lived in Darwin myself, which says something about what a cyclical type of place it can be. 
Through recent episodes of disruption there have been strong correcting factors such a once-in-150 year resources boom or the Cyclone Tracy rebuild to drive the Territory forward. 



I'm not sure what comes next for the NT through the Ichthys/INPEX construction phase wash-up, but then again I haven't been to Darwin for a couple of years and it's the sort of place that likes to deliver surprises. 


The wrap
Overall, then, estimated growth in the resident population at +395,600 was comfortably stronger than a year earlier, when it was +370,400.
Australia's estimated resident population will accordingly pass 25 million within just a few months from today, with Queensland's population projected to surpass 5 million in May. 
After accounting for the concentration of migrants into the capitals Greater Melbourne is growing at about the fastest pace ever.

Sydney is losing some residents internally to the NSW regions, to the south, north, and west, as Baby Boomers take their new-found housing equity elsewhere for a lifestyle change.
South-east Queensland population growth will pick up as the magnetic north does its thing, and in fact it already is as anyone living in inner Brisbane will testify.

Next I'll get around to posting my mapping population growth versus dwelling completions, which will reveal an interesting outcome or two, especially for Melbourne and Brisbane.

Pete Wargent

Pete Wargent

Pete Wargent is the co-founder of, offering affordable homebuying assistance to all Australians, and a best-selling author and blogger.

Pete Wargent Population Growth

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