Our Rising Population and Its Impact on the Sydney Property Market
The Australian population is on a merry ride; what with a growth of 1.8% last year. We have added roughly 0.4 million people to the kitty of Australian citizens in 2012. All good but this brings forth a few pertinent questions. Is the housing sector good enough to keep abreast with the rising population? This is just one of the many questions that spring up.
The population in Australia is getting a fillip due to two main reasons. The first is termed as Natural Increase and is expressed as the difference between “number of births and deaths”. With low mortality rate, the natural increase is only expected to aid the population graph further in coming years.
The second factor is the ubiquitous overseas migration. It has brought in working class in ever so high numbers within the Australian shores. Net migration has doubled in the last 8 years and we have added nearly 240,000 to our population through net migration last year.
Why some states witness steep population rise and some don’t
Of course, few states find themselves steeply rising on the population curve while others lag behind. While there are many reasons for the trend, net interstate migration turns out to be a key factor.
A few states drain people out while others siphon them in.
Factors like a) brightness of opportunities available, b) the performance of the housing sector, c) the number of growth-drivers (single-industry economy or multiple-industry economy) among others determine how much will a state soak in or bleed out individuals.
New South Wales doing exceedingly well
Tasmania and South Australia are finding out rather quickly that they are not providing enough reasons for people to stay (complete lack of depth in their markets). They have grown at a paltry rate of under 1%. Places like Queensland, NSW and Victoria are growing rapidly both in terms of “wealth factor” and population.
Sydney has done rather well with New South Wales adding 90,400 people to its kitty last year. The good part is that the ratio of skill stream: family migration is loaded in favour of Sydney and a lot many skilled workers have been added to its tally lately.
Addition of skilled working-class great news for Sydney Property
This skilled-class will be an apt replacement for the baby boomer generation even as it looks to create its own job opportunity. These people who are expected to generate their own wealth will look more and more towards living in the four main capital cities.
Overseas migrants can be a blessing
This is one reason why Sydney should keep piling the inflow of migrants and keep benefiting from it too. The overseas migrants will fill us on their knowledge of overseas practices and business networks, will fuel demand in certain areas and also heighten investments.
Onshore grants have increased too
Another point worth noting: not only the settler arrivals but also the number of onshore grants is increasing. The latter is offered to student class who wish to settle permanently (have been living on a temporary visa till now).
The rapid development of Australia is luring them to stay forever and these are the individuals who are bound to feel more loyal about our country, adding a lot to its near-future wealth factor.
Population growth brings to the surface the crux question of housing supply.
Running short of dwellings- what’s the road ahead?
We are running short of nearly 170,000 dwellings at the moment. Oversupply in uninhabitable or lousy estate areas won’t help the cause. Development-ready land needs to increase manifold. Off-the-plan constructions need to honour time-frames, something which is not happening at large.
We have to stand up to our ‘median’ housing commitments and also look into the micro lots more engagingly. After all, we have a First Home Buyer population to cater to.
While the population growth is great news (we are not India or China where it can be perceived as a threat), our ability to turn it into a machine for growth is the main question at hand.
Do you think New South Wales will witness greater migration (overseas and interstate) in coming years and what will be the impact for the Sydney property market?