Australians continue to choose to move to Victoria
Demographic data from the Australian Bureau of Statistics (ABS) showed that Australia’s estimated resident population was 24,220,192 persons at the end of September 2016. Overt the 12 months to September 2016 the national population increased by 1.5% or by 348,695 persons. The 1.5% growth in the population was the largest annual rise since September 2014 while the 348,695 persons increase was the greatest since March 2014.
At a national level there are two components of population growth, net overseas migration and natural increase (births minus deaths). Net interstate migration is important between the states and territories but has no effect at a national level. Over the 12 months to September 2016, the population’s natural increase was recorded at 155,472 persons which was a 5.1% increase over the year. Net overseas migration saw the national population rise by 193,223 persons over the year with it increasing by 8.9% over the year. The above chart shows that after declining from a recent peak in 2012, net overseas migration is once again trending higher.
Across the states and territories, Victoria is leading the way in terms of both the rate of population growth and the total increase in population. While Victoria’s population has grown by 2.1% over the 12 months to September 2016, the national population has increased by a substantially lower 1.5%. The rate of population growth only tells part of the story though, in terms of the actual increase in population over the year in each state and territory, the figures are recorded at: 109,605 persons in NSW, 127,498 persons in Vic, 67,699 persons in Qld, 9,438 persons in SA, 25,242 persons in WA, 2,593 persons in Tas, 812 persons in NT and 5,778 persons in ACT. Vic’s population increase over the past year was its highest on record while NSW’s was the greatest increase since June 2009. The pace of population growth is also gathering some momentum in Qld, Tas and ACT. On the other hand, the annual increase in WA’s population was the lowest for the state since June 2003.
Although certain states and territories are seeing an increase in population growth, most of the national population growth is occurring in NSW and Vic. Over the 12 months to September 2016, more than two-thirds (68.0%) of all population growth occurred in these two states. The 68.0% represents a record high proportion of national population increases for these two states. To put these latest results in context, five years earlier the two largest states combined accounted for 48.8% of the total population increase. Over the long-term, these two states have accounted for 49.5% of the total national population increase.
The above chart highlights the three components (natural increase, net overseas migration and net interstate migration) of population growth across the states and territories. While little can be done to influence natural increase, we will focus on net overseas and net interstate migration. These two components are proving to be heavily influenced by the economic performance of different states and territories.
Looking first at net overseas migration, we previously noted it was recorded at 193,223 persons over the 12 months to September 2016. Across the individual states and territories it was recorded at: 76,529 persons in NSW, 68,613 persons in Vic, 21,469 persons in Qld, 9,279 persons in SA, 13,315 persons in WA, 1,265 persons in Tas, 756 persons in NT and 1,992 persons in ACT. While each state and territory are attracting an increase in population from net overseas migration, NSW and Vic are overwhelmingly seeing the largest increases. NSW (39.6%) and Vic (35.5%) combined have accounted for a record-high 75.1% of net overseas migration over the past year. The increase in Vic population from net overseas migration was the highest for the state since September 2009 and for NSW it was the highest since December 2009. In WA, the net overseas migration of 13,315 persons was the states lowest figure since September 2000.
Net interstate migration is irrelevant at a national level but is very important between states and territories. Over the 12 months to September 2016, net interstate migration was recorded at
-11,733 persons in NSW, 17,185 persons in Vic, 12,966 persons in Qld, -6,484 persons in SA, -9,198 persons in WA, -8 persons in Tas, -2,804 persons in NT and 76 persons in ACT. Annual net interstate migration to Vic is at an historic high, is at its highest level since June 2009 in Qld and is positive for the first time since December 2012 in ACT. Net interstate migration from NSW is seeing its rate of decline accelerate but it remains well below the long-term average outflow. The net outflow of SA residents is at its highest level since March 1996 and the outflow from WA is the greatest it has been on record. The data clearly points to the fact that Vic is the destination of choice for interstate migration currently. We are also seeing an increase in the rate of departure of residents from NSW with an increase in Qld, housing affordability in Qld relative to NSW is likely a contributor to these figures, as well as renewed demand for lifestyle options along the Queensland coastline.
The NSW and Vic economies are currently much stronger than those across the rest of the country, as a result more people are choosing to migrate to those two states. This creates more demand for housing and is clearly a contributing factor to the rapid appreciation in Sydney and Melbourne dwelling values which has been occurring for a number of years now. While overseas migrants remain attracted to both NSW and Vic, it appears more Australian residents are attracted to Vic with net interstate migration waning in NSW. There has recently been an uplift in net interstate migration to Qld which is running in parallel to the larger outflow of residents from NSW; this will be an important trend to watch over coming quarters, particularly with relation to how it impacts on housing demand in Qld.
Australia continues to see a relatively high rate of population growth with a majority of that growth occurring in the two largest states. Most of the migrants moving to Australia are choosing to settle in the two largest states which creates competition for housing and leads to value increases. Furthermore these migration trends also create a greater requirement for investments in essential services like schools and hospitals as well as new roads and public transport infrastructure. If population growth is to remain so high, particularly in NSW and Vic, governments are going to need to invest a lot more than they currently are in infrastructure upgrades and providing essential services. Furthermore, while these conditions persist, housing affordability is likely to continue to be an ongoing political issue in the major cities of Sydney and Melbourne.
