A race to the regions. Really?

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key takeaways

Key takeaways

Despite what the media is telling you there is still no race to the regions.

Much of the regional growth is in the areas immediately adjacent to the major capital city boundaries and more often than not within commuting distance to the big smoke.

Our truly regional centres aren’t growing any faster than usual.

While the annual population growth in Australia has plummeted due to our Covid Cocoon, our net immigration intake is about to ramp up and big time.

The big shift to regional Australia is indisputably on.

This topic has got a massive head of steam.

To be a bit flippant, it needs a good slapping down.

Below is a recent press clipping from The Oz newspaper.

01

To repeat there is no race to the regions.

If my recent conversations are any guide, then a lot of people are making real estate buying decisions, on this shallow analysis and associated exposure.

To deliver a final smack here, let’s focus on the population growth figures for New South Wales, Victoria, and Queensland.

The table in the media article correctly states that Sydney’s population lost -5,200 people over the twelve months to 20th June 2021, whilst NSW’s regional locations gained 26,800 peeps.

Melbourne lost 60,500 people yet regional Victoria’s headcount was up 15,700.

And the Brisbane capital region grew by 21,900 folks and the Qld regions rose by 24,100 people during fiscal 2021.

Here’s where regional growth is occurring

As explained several times over the last two years, much of this regional growth is in the areas immediately adjacent to the major capital city boundaries and more often than not within commuting distance to the big smoke.

Population2

In NSW some 38% of the recent regional population growth was in the Newcastle area; followed by 19% in the Wollongong region and another 9% in Richmond/Tweed adjacent to Queensland’s Gold Coast.

Ballarat, Bendigo, and Geelong accounted for 70% of Victoria’s regional increase last year.

And in Queensland, the Gold Coast held a 35% market share of the state’s regional population growth: with the Sunshine Coast coming in second with 30%.

The next biggest regional Queensland growth market was the Fraser Coast (think Hervey Bay) with a 1,670 population increase – or 7% of the overall regional growth tally – during financial 2021.

In fact, all but three Queensland regions, saw their annual population growth rates fall during 2021.

The exceptions were Mackay, with an 840 increase in 2021, compared to the 300 previous five-year annual average.

Gympie, up 790 last year, compared with its 680 average, and Gladstone, with 335 versus 235.

For mine charts 1 and 2 hammers the final nail in the ‘trend setting’ regional growth coffin.

Chart 1 shows that annual population growth in Australia has plummeted.

It is at its lowest level since the first world war.

The big reason for this fall is that overseas migration has stopped due to Covid restrictions.

Some 70% of the population growth in our capitals comes from immigration.

02

 

Chart 2 shows a big fall in population growth in our major cities and importantly very little change in regional growth numbers.

Our truly regional centres aren’t growing any faster than usual.

The absence of overseas migration makes their recent population growth rates look ballistic when compared to our bigger cities.

Despite headlines and the talking heads spruiking otherwise, there isn’t really much to see here.

Oh, and both my charts in this post – and whilst I would argue such action needs some really careful deliberation – indicate that our annual net immigration intake is about to ramp up and big time.

About
Michael is director of independent property advisory Matusik Property Insights. He is independent, perceptive and to the point; has helped over 550 new residential developments come to fruition and writes his insightful Matusik Missive

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