Exploring the link between population growth and property prices

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key takeaways

Key takeaways

Australia has experienced net emigration, where more people have left than have arrived.

The birth rate has now hit the lowest ever recorded in Australia.

The future of Australia is still an urban and city-centric one, not just a capital city future.

The capitals, other than Sydney and Melbourne, are seeing strong growth.

Australians are looking for quality neighbourhoods to live in and a key factor in this is the built environment.

Over the last couple of years, the key factors driving Australia’s population growth have all fallen.

The biggest factor of growth prior to COVID-19 was net overseas migration, which accounted for 60% of the population increase in recent decades.

However, for the first time since World War Two, the net overseas migration rate has gone into the negative.

Instead, Australia has experienced net emigration, where more people have left than have arrived.

Migration

The other factor of population growth is natural increase.

The birth rate has now hit the lowest ever recorded in Australia.

The fertility rate is now less than half what we had at the peak of the baby boom in 1961.

The total annual births have just slipped below 300,000, for the first time in almost a decade.

It will take the rest of this decade to get back to what would have been Australia’s annual growth rate.

The loss of numbers over the last few years and the slow recovery means Australia’s population in 2031 is now forecast to be 29 million, rather than the pre-COVID forecast of 30 million.

The economic impacts

The Treasury Intergenerational report shows that this slower growth will have an impact on GDP and will exacerbate the aging of Australia’s population.

While slower population growth has benefits (like allowing the nation to catch up on infrastructure shortfalls and to plan the ideal population numbers for Australia), it will have economic impacts in the medium term.

Economy

Areas projected for growth

Queensland is currently Australia’s fastest-growing state and Brisbane is the fastest-growing city.

This is quite a turnaround from pre-COVID, where Melbourne was the fastest and Sydney was in second place.

The capitals, other than Sydney and Melbourne, are seeing strong growth.

But it is regional growth that is the marked change since the pandemic.

This rebalancing of our population, from the large capitals to the regions, is a trend that’s here to stay that will have economic benefits as it spreads population growth.

While the regions experience economic growth, it will allow the largest cities of Sydney and Melbourne to catch up on some infrastructure and planning shortfalls before overseas migration returns at full pace.

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