The Australian Bureau of Statistics (ABS) recently published the March 2019 quarter demographic data. The data showed that at the end of the first quarter of 2019 the estimated residential population of the country was 25,287,394 persons, which was 0.5% higher over the quarter and 1.6% higher year-on-year.

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The above graphs show the quarterly change in the national population and the components of the population growth along with a rolling four quarter trend. The charts show that the rate of population growth nationally has eased a little and remains lower than its peak. In saying that, on an historic basis, population growth remains quite strong tracking almost 70% above the thirty year average. At a national level, population growth is driven by two factors, natural increase (births minus deaths) and net overseas migration. Natural increase has trended slightly lower while net overseas migration was up 1.7% compared with the March quarter last year. Keeping in mind that the first quarter of any year is typically quite strong for net overseas migration, it accounted for 73% of the population growth compared to the natural increase accounting for 27.0% over the March quarter.

Let’s now look at the individual states and territories where net interstate migration is also a consideration for population growth.

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At the end of the March 2019 quarter, the estimated resident population of NSW was 8,071,071 persons. Over the quarter, natural increase was recorded at 10,744 persons, net overseas migration was recorded at 28,504 persons and net interstate migration saw 5,686 persons leave the state. Natural increase was slightly higher than the previous quarter but lower than the same quarter last year. Net overseas migration rose significantly over the quarter however, it was -5.9% lower than the same quarter in 2018. Finally, the outflow of residents from NSW was slightly lower than over the previous quarter but was marginally higher than the 5,588 persons a year earlier. In trend terms, natural increase has increased slightly while migration is slowing with fewer net overseas migrants and net interstate migration seeing more residents move away from NSW.

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The graphs above highlight that in Vic the quarterly change in population is trending lower due to quite large declines in natural increase (noting the material decline in the March quarter is attributable to processing delays from the Victorian Registry of Births, Deaths and Marriages and will revise higher) and net interstate migration and a more moderate fall in net overseas migration. Over the quarter, the Vic population increase by 40,224 persons down from 45,574 a year earlier with natural increase of 5,107 persons, net overseas migration of 31,709 persons and net interstate migration of 3,518 persons.Natural increase was -52.1% lower year-on-year (as noted, will revise higher), net overseas migration was 2.4% higher year-on-year and net interstate migration was -10.9% lower year-on-year. Despite the slowing increase in population, Vic still recorded the largest raw number increase in population of all states and territories over the quarter.

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Unlike NSW and Vic, the population growth in Qld is picking-up due to increasing rates of net interstate and net overseas migration. The population of Qld increased by 24,855 persons over the quarter with natural increase of 7,785 persons, net overseas migration of 11,895 persons and net interstate migration of 5,175 persons. Despite population growth trending higher, natural increase is -5.8% lower year-on-year, net interstate migration is -9.2% lower year-on-year while net overseas migration is 4.9% higher. Qld now has the highest rate of net interstate migration of any state and territory.

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Population growth is accelerating in SA due to a higher number of net overseas migrants and the net loss of residents to other states and territories slowing. The 5,716 person population increase over the March 2019 quarter was up 6.6% on the same quarter in 2018. Over the quarter, natural increase was 1,680 persons, which was -3.2% lower than a year earlier. Net overseas migration was recorded at 4,938 persons over the quarter, 4.7% higher than the same quarter last year and its highest quarterly number since March 2009. Net interstate migration saw 902 persons leave SA over the quarter, down from a loss of 1,091 persons a year earlier.

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WA has seen its rate of population growth slump over recent years however; it now seems to have turned a corner and is accelerating from a low base. Over the quarter, the population increased by 9,991 persons which was its greatest quarterly increase since March 2014. The population increase was comprised of natural increase of 4,798 persons, net overseas migration of 6,335 persons and net interstate migration seeing a loss of 1,142 persons. Natural increase was -6.7% lower year-on-year and net overseas migration was 33.8% greater. The loss of residents from net interstate migration was the lowest it has been since December 2014.

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Tas is currently seeing its population increase at a pace it hasn’t done so since 1990 with the population increasing by 1,817 persons over the first quarter of 2019. Tas recorded natural increase of 291 persons, which was actually -24.8% lower year-on-year. Net overseas migration of 1,044 persons was 28.1% higher than the previous March however, the 482 net interstate migrants was -35.7% lower than the year before. The net overseas migration of 1,044 persons over the quarter is the largest on record based on data available from 1981.

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NT has continued to see its population fall over the March 2019 quarter, shedding 88 residents compared to a slightly larger loss of 234 residents a year earlier. Despite a quarterly increase in population of 706 persons from natural increase and 468 persons from net overseas migration net interstate migration saw a loss of 1,262 residents over the quarter. Natural increase was actually 5.2% higher than the previous year and net overseas migration was 47.6% higher while the loss from net interstate migration was slightly larger than 1,222 persons a year ago. In trend terms, each of the three components of population growth in NT are heading lower.

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Population growth is trending lower in ACT and now trending lower across each of the three components. Over the March 2019 quarter, ACT population increased by 2,397 persons with natural increase accounting for a 901 person increase, net overseas migration accounting for a 1,679 person increase and a net 183 persons leaving ACT. While natural increase in March 2019 was actually 8.0% higher than a year earlier, net overseas migration was -13.5% lower and the 183 person loss due to net interstate migration was a turnaround from the 122 person increase a year earlier.

At a national level, the rate of population growth is steady at 1.6% but the trends are seeing some differences from recent years. Over recent years NSW and Vic have been the drivers of population growth and they remain so however, population growth in these two states is now trending lower while the rate of population increase is climbing in the other state (Qld, SA, WA and Tas) while the territories are seeing the population reduce in the NT and growth slowing in ACT.

The demographic trends provide a reasonably proxy for housing demand. As the pace of population growth eases in NSW and Vic, but gains some momentum in other states, we are seeing housing demand lifting in those markets where housing conditions have generally been subdued (at least relative to Sydney and Melbourne) and prices are much more affordable. If the trend continues its likely to translate towards some upwards pressure on housing prices outside of Sydney and Melbourne.