Berry Blog

Over the 12 months to December 2018, the estimated residential population of Australia increased by 1.6% or by 404,783 persons. The 404,783 person increase in the population was the largest increase in raw number terms since September 2017 and it was also the third consecutive quarter in which the annual population increase trended higher.

Looking at the two components of population growth at a national level (natural increase and net overseas migration), net overseas migration remains the primary driver of population growth.  Over the year, natural increase was recorded 156,337 persons, the highest it has been since March 2015 and 8.5% higher than in December 2017.  Net overseas migration was recorded at 248,446 persons, the highest it has been since September 2017 and 2.8% higher than the previous year.

The data shows that the national population is still growing at a rapid rate despite recent moves to lower permanent migration.  The population of NSW and Victoria continues to grow by the greatest amount.  Population increase in NSW is primarily driven by natural increase and net overseas migration, accounting for 37.0% of national net overseas migration.  Victoria has seen 34.6% on net overseas migration nationally over the past year and has also recorded the second highest rate of net interstate migration (behind Queensland). Vic, Qld, Tas and ACT are seeing a positive rate of net interstate migration as more people arrive from interstate than leave. Over the coming quarters it is expected that similar trends will continue with strong population increases in NSW and Victoria driven by overseas migration and strong rates of net interstate migration for Victoria and Queensland.

Of course population growth, particularly migration, is a proxy for housing demand. High levels of migration mean increased demand for housing which is a factor that should assist in putting a floor under the recent declines in dwelling values (particularly in Sydney and Melbourne).  Furthermore, increasing populations should also assist in the absorption of the large volume of apartments under construction in Sydney and Melbourne.

Source: Cameron Kusher/Corelogic/June 2019