Population growth back at 2005 levels

The Australian Bureau of Statistics (ABS) released the quarterly Demographic Statistics update for December 2010 this week which tracks changes in population.  Over the 12 months to December 2010, Australia’s population increased by 1.5 percent, its slowest rate of population growth since the 12 months to December 2005.  Despite the lower rate of growth, Australia’s population still increased by more than 325,000 persons over the 12 months.  Although the number is well below the 467,000 new residents over the 12 months to December 2008, it is still strong number nonetheless (running 2.3% above the decade average).

At a national level, population growth is driven by two factors: net overseas migration (the number of Australian’s leaving the country for more than 12 months vs. the number of migrants intending to stay in Australia for more than 12 months) and natural increase (births minus deaths).  Over the 12 months to December 2010, the population naturally increased by approximately 154,000 persons while net overseas migration accounted for 171,000 new Australian’s.  With population growth slowing, both the level of natural increase and net overseas migration have fallen in recent times.  Over the 2010 calendar year, the natural population increase has fallen by -1.8% compared to a -35.2% decline in net overseas migration.

On a state-by-state basis, population growth is slowing in each state except for the Australian Capital Territory, with its population growth over the last 12 months the strongest since the 12 months to June 2007.  In percentage terms, population growth is strongest into Western Australia (2.1%), the Australian Capital Territory (2.0%) and Queensland (1.7%).  On the other hand, population growth is slowest in: Tasmania and the Northern Territory (both 0.8%).  Although population growth is still relatively strong into Queensland, during the past 12 months the rate of population growth was the slowest since the 12 months to March 2000.

At a state level, net interstate migration numbers are added into the population equation.  Historically, natural increase is strongest (in numeric terms) within the most populous states and that will continue to be the case.  Interestingly, the fertility rate in the Northern Territory is much stronger than all other states and territories.  Putting natural increase aside it is important to analyse interstate and overseas migration.

The most popular state for overseas residents to settle within Australia has always been New South Wales.  Historically, Victoria has tracked quite closely with Queensland however, in recent years it has tracked much more closely to New South Wales, with a greater number of overseas settlers choosing Victoria.  This is probably a result of the emergence of Melbourne as a much more important commercial centre in recent years and the relative affordability of housing in Melbourne as opposed to Sydney.  All other states continue to attract overseas migrants but at a much lower level than those moving to New South Wales and Victoria.

While overseas migrants have always had a preference for New South Wales (Sydney) and Victoria (Melbourne), Australian’s have always had a clear preference for re-locating to Queensland.  At its peak during the 12 months to September 1993, Queensland attracted almost 50,000 interstate migrants for the year.  Interstate movements into Queensland have been slowing since 2003.  Over the long-term, interstate migration into Queensland has averaged more than 27,000 persons annually, over the last 12 months just 7,243 persons migrated to Queensland from interstate, -73% below average.  It is no wonder Queensland is attracting fewer interstate migrants, the net outflow of residents from New South Wales is at its lowest level since the late 1990’s and interstate migration into Victoria is at its highest levels since mid 2002.  Add to this the lure of the mining dollar in Western Australia and the halting of the sea change migration trend and it is easy to see why interstate migration into Queensland is down so much.

Overall, the slowdown in population growth is the result of a targeted Government policy to slow the intake of overseas migrants.  With the labour markets remaining tight and wages growing at a rate above inflation it may be necessary to again revisit migration targets on top of the increases announced in the latest budget.

Related posts:

1. Australia’s rate of population growth slows during March
2. Housing demand appears to have peaked with population growth slowing across Australia.
3. More analysis of population growth and housing supply
4. Record home sale shows top end is back… but will the fear of rising sea levels deter future waterfront purchasers?
5. Population growth is booming but housing starts remain at historic lows