Housing Demands Peaked

Australia’s dramatic rate of population growth appears to have peaked, with the number of overseas migrants tanking in December.  Total population growth was down 18% in the December quarter of 2009 compared with December 2008.

Net overseas migrants are down significantly since peaking in the March quarter last year at 98,140.  In the December quarter of last year net migration was just 49,170 – about fifty percent lower than peak overseas migration less than a year ago.

The slowdown in overseas migration is likely to be due to a number of factors.  During the early part of last year, Australia was one of the few bright economies in an otherwise dim global economic climate.  Fewer residents were leaving Australian shores thanks to the rosier economic conditions.  With some improvement in global economic conditions, departures from Australia have picked up.  Based on ABS arrivals and departures data, permanent overseas departures were about 10 percent higher in April this year than April last year.  The increase in departures was compounded by a slump of equal magnitude in overseas arrival numbers.

Even though we have seen a slowdown in net migration levels, the number of overseas migrations remains about 15 percent above the decade average.

At the state level we are seeing some interesting trends.  Interstate migration into Queensland continues to slow; at the same time, in a virtual mirror image, the number of interstate migrants flowing out of New South Wales is continuing to moderate.  This dual trend has been evident since late 2001 when the housing price gap started to narrow.  Back in 2001 Brisbane house prices were about 50 percent lower than those of Sydney.  The gap has since narrowed to about 20% (and was as low as 12% in early 2008).

Despite the improvements in the intestate outflow of residents, New South Wales remains as the state bleeding the largest number of residents to other states and territories.  Over the last year about 13,800 more residents left New South Wales than arrived from other states or territories.  The other states that are experiencing a net outflow of residents to other states are South Australia (-3,317 residents), the Australian Capital Territory (-599 residents) and Tasmania (-50 residents).

The fastest growing populations remain in the resource rich regions.  Western Australia’s population increased by 2.7 percent over the year, Queensland’s population increased by 2.4 percent and the population in the Northern Territory increased by 2.2 percent. As the resources sector continues to bounce back it is a safe bet that these states will continue to see the fastest rates of population growth.

Source: RPData Property Pulse