The latest population data has been released and it tells a very interesting story on how Australia is settling and growing. It remains a very Eastern State centric platform and with that, the challenges of how to distribute economic benefit and control economic development. This is even more apparent when consideration is actually given to the current growth profiles of each. One thing is for sure, urbanisation and suburbanisation are going to become discussions that are more frequent around the BBQ's of Australia as different age groups bemoan or love what is happening in their cities.
The natural growth by State largely replicates the total population growth with the exception that the younger populations of QLD, WA and the NT are all contributing at a higher growth rate. Despite the challenging economic conditions of W.A and NT, the young family or “Family Formation” cohort continues to be a large part of the demographic fabric of those states. As economic drivers in their own right, this is a healthy outcome. Think about the various levels of education, healthcare, retail etc. There is very little this demographic cohort doesn't touch on in society. They are also the early adopters of technology representing the future of our cities and regions.
The real drivers of much of the economy in the State’s and Territories can be attributed to International migration. With an annual overseas migration of 98,570 people, NSW needs to create a minimum of almost 38,000 dwellings to house this population segment alone. Victoria needs to build almost 33,500 things and then it is a very substantial drop to QLD that will only have to create approximately 12,000 new dwellings.
The numbers for NSW and VIC are huge economic drivers for their economies, however they are also one of the main factors in creating substantial affordability related problems. If the Federal government is keen to change these circumstances, a reduction in migration would be an easy knee jerk reaction, however the redistribution of the settlement patterns to other States would have far reaching benefits to those less fortunate. We are however still a long way away from the Big Australia that drove debate a few years back.
After many years of having interstate migration go into decline, QLD is again leading the nation in interstate migration patterns. This is a combination of greater job opportunities on the back of rebounding resource prices and a more diverse economy, but also the significant affordability gap that has been created between Brisbane and Sydney, and to a lesser extent Melbourne.
The brain drain continues to occur in South Australia and W.A is still seeing its workforce boomerang back to previous addresses or moving interstate looking for new opportunities. NSW remains a net loser in this space, though it appears that QLD is now the major recipient, rather than Victoria as was previously the case.
So, what does all this mean? Quite simply that the States of NSW and VIC will continue to outpace the rest of the country, improve on economies of scale and suffer in their lifestyle options if the necessary infrastructure continues not to keep pace. Cities like Brisbane and Perth will continue to offer lifestyle advantages at prices that the aforementioned States and cities can only dream about.
If you were looking for upside in property, you would have to say Brisbane is where it’s at…but then most southern developers are already trawling the market looking for sites that will allow them to continue to develop with sound profit margins and presumably less risk as result. Is it Queensland’s time to shine…the clouds certainly seem to be parting, so long as the government doesn’t get in the way.
Matthew Gross | Director | firstname.lastname@example.org