Housing Demand Is Rising At The Fastest Rate Since December 2009
The latest demographic update released by the Australian Bureau of Statistics late last month provides an overview on population growth and migration flows up to March 2012. The data revealed the rate of population growth, at 1.49%, was the highest rate of growth since the last quarter of 2009 and net overseas migration was at the highest level in two years, with just over 197,000 net overseas migrants arriving in Australia over the twelve months to the end of March. That’s 18% higher than what was recorded a year ago, highlighting how significantly Australia’s rate of net migration growth has turned around.
Every state has seen an increase in the level of overseas migration, with New South Wales and Victoria attracting the largest raw numbers. Western Australia has seen the most significant uplift in overseas migrants, with the net number of new residents from overseas up 49% over the year to March 2012.
The trends in interstate migration are the most interesting, at least in my view. Phil Lowe, the Deputy Governor of the Reserve Bank, included a great series of graphs in his recent speech in Hobart that makes it very easy to compare the interstate migration trends (below).
Interestingly, Queensland has never had a net outflow of residents (and New South Wales has never had a net inflow) and the net inflow into the state is once again ramping up. Western Australia is also seeing a strong surge in net flows of new residents over the border, a factor which is clearly being influenced by the resources sector.
Historically, Queensland has attracted the lion’s share of interstate migrants, but since 2010 Western Australia and Queensland have been recording fairly similar numbers of net interstate migrants.
Stronger population growth is a significant factor for the housing market because it creates demand for housing. The weakness in Tasmania’s housing market can partly be explained by the fact that the state has been seeing an exodus of residents to other states and territories that has been getting progressively worse over the past year.
Looking forward, we can expect population growth to continue to increase across Australia. If the Department of Immigration forecasts are anything to go by (table below), we are likely to see higher levels of population growth over the coming years on the back of further overseas migration.