New analysis from the Housing Industry Association confirms the strong linkages between population growth, economic performance and real estate markets.
HIA senior economist Shane Garrett says the latest ABS figures show there continues to be a strong link between population growth and economic performance, while Hotspotting managing director Terry Ryder says the local economy is the single biggest factor driving real estate markets.
ABS Demographic Statistics indicate that Australia’s population rose 1.6% over the year to the September 2017, equivalent to 395,600 additional residents.
“The strongest-performing labour markets in Australia remain those that have experienced the largest increases in population over recent years,” Garrett says.
He says population growth in Victoria is stronger than in any other part of Australia and that this has had positive impacts on the state’s economy and growth in employment.
Ryder says this has been a core factor in strong growth in house prices in Melbourne in the past three years.
“The Victorian economy is very healthy with robust gains in employment over recent years,” Garrett says. “The latest ABS figures show the number of jobs in Victoria has increased by 68,000 over the past year.
The HIA says that inward migration boosts the economy’s productive capacity and is an important support for consumer demand.
But it says population growth does place additional pressure on our cities and there needs to be better city planning, including increased funding and delivery of new and upgraded infrastructure. Jobs creation also needs greater priority.
“The long-term risk for Australia is that we will have too few people of working age over the coming decades,” Garrett says. “The realistic option for us is to keep the door firmly open to the migrants we need.
“HIA supports a managed migration program that is sufficient to deliver ongoing growth in Australia’s economic performance, productivity and workforce capacity. These conditions are essential for continuing to win investment from overseas,”
Over the year to September 2017, Victoria saw the strongest growth in population (2.4%), followed by the ACT (1.8%) and Queensland (1.7%).