Migration Remains the Key Driver of Population Growth

The latest demographic data from the Australian Bureau of Statistics (ABS) shows a rapid rate of population growth with migration the key driver.

The December 2016 quarter demographic data shows that at the end of 2016 the national population was estimated to be 24.4 million persons which had increased by 1.6% over the year.  The 1.6% annual increase in the national population was the largest since the 12 months to June 2014, while in raw numbers, 372,805 more residents called Australia home over the year which was the largest increase in numbers since March 2014

Components of annual population growth, National

Migration, both in the form of net overseas and net interstate migration remains the key driver of national population growth.  Over the year, net overseas migration was recorded at 208,953 persons which accounted for 56% of the national increase in the population.  Monthly overseas and arrivals data shows that over the 2016 calendar year, the largest sources of permanent arrivals to Australia were: India (22,180 persons), China (18,050 persons) and New Zealand (11,740 persons). The first chart shows the two components of nation population growth (net overseas migration and natural increase) on a rolling annual basis. 

Annual net overseas migration across the states and territories

While interstate migration nets to zero at a national level it is an important component of population growth across the individual states and territories.  Interstate and overseas migration in particular are drivers of housing demand whereas natural increase removes older people and adds younger people, interstate and overseas migration brings a new person or family to a region of the country and these people need to be housed. 

Annual net interstate migration across the states and territories

Overseas migrants are overwhelmingly choosing to migrate to either NSW or Vic which isn’t really a surprise when you consider that those two economies are the strongest nationally.  NSW (40.6%) and Vic (35.4%) combined accounted for 76.0% of net overseas migration nationally in 2016 while if you add Qld (11.0%), only 12.9% of net overseas migration flowed to areas outside of the three most populous states. 

Four states and territories (Vic, Qld, Tas and ACT) recorded positive net interstate migration through 2016 with the remaining four states and territories seeing a net loss from interstate migration.  Interstate migration into Vic is at an historic high level and in Qld there has been a substantial rebound recently however, it remains dramatically lower than its historic high.  The net outflow of residents was recently at historic low levels however, over the past couple of years the direction has reversed and the outflow of residents from NSW has again gathered pace.  In WA, the net outflow of residents away from the state to other areas of the country is currently at an historic high.

Annual net migration across the states and territories

By combining net interstate and net overseas migration we can get a picture on total net migration across the states and territories.  Over the 2016 calendar year, the Northern Territory was the only state or territory to record a net loss from migration (-2,340 persons).  Vic is the nation’s largest benefactor from migration with 44.0% of total net migration over the past year into that state, followed by NSW (34.5%) and Qld (18.0%).  The remaining five states and territories accounted for a combined 3.5% of net migration nationally over the year which was an historic low.

The migration trends show a clear preference for overseas migrants to settle in either NSW or Vic.  Meanwhile, interstate migrants appear to be turning their backs on NSW and WA and choosing to move to Vic and Qld.  NSW is likely to be less attractive for interstate migrants due to the high cost of housing while the ongoing weak housing end economic conditions are the main deterrents in WA.  Vic in particular is attractive to migrants because wages are similar to those in NSW but housing is much cheaper while the economy is performing similarly strong. Qld appears to be growing in popularity again largely due to the fact that housing is much cheaper than NSW and Vic and lifestyle housing markets in South-East Qld seem to be seeing resurgent popularity.