Population growth can be one of the drivers for demand on accommodation and property. Following are some of the key points from Westpac's Weekly analysis. Westpac anticipate that population will increase well beyond initial predictions. This will mean a high demand on accommodation. If there is a shortage in accommodation supply, as predicted by many economists, there will be significant increases in property prices and rent in many areas across Australia.
1. Population Growth Dynamics: The COVID-19 pandemic had a significant impact on Australia's population dynamics. Before the pandemic, the country had an average net migration intake of about 235,000 per year.
2. Pandemic's Effect on Migration: Due to border closures and pandemic-related restrictions, net migration essentially halted, with a net outflow of 5,000 in 2020 and a modest inflow of 6,800 in 2021.
3. Post-Pandemic Migration Surge: In February 2022, Australia reopened its borders, leading to a historic surge in net migration. Net migration reached +408,900 in 2022, contributing to a 2.0% year-on-year population growth.
4. Revised Population Growth Forecast: Initial forecasts expected a slowdown in net migration to +350,000 in 2023 and +275,000 in 2024. However, actual population growth has exceeded these forecasts. Westpac now expects population growth to be 2.3% (475,000) in 2023, 1.9% (375,000) in 2024, and 1.5% (275,000) in 2025.
5. Excess Migration Gain: These revised forecasts indicate an "excess" gain of 240,000 in 2023, 140,000 in 2024, and 40,000 in 2025 compared to pre-pandemic levels.
6. Historical Comparison: This rapid shift in migration dynamics is reminiscent of the post-WWII migration boom in Australia.
7. Data on Population Growth: The article mentions a lag in updates on Australia's estimated residential population (ERP). The working age population growth, based on the ABS Labour Force Survey, has been steadily increasing.
8. Expected Peak in 2023: Population growth accelerated sharply in 2022 but is expected to taper toward its peak in 2023.
9. Factors Affecting Migration: The easing of net migration is anticipated due to factors like the unwinding of the COVID-19 "catchup," changes in migration policy, and the return of temporary migrants.
10. Policy Changes: The government has introduced policy changes to address migration issues, such as limiting the Pandemic Event visa applications and reinstating work-hour restrictions on student visas.
11. Departure Flows: Departure flows, which have been below pre-pandemic levels, are expected to increase as processing issues are resolved and individuals return overseas.
12. Impact on Economic Outlook: Population growth has played a crucial role in Australia's economic strength. With a slowdown in population growth, GDP per capita is expected to decline in the coming years, and the unemployment rate is forecasted to rise.
Overall, the article discusses the impact of the COVID-19 pandemic on Australia's migration and population growth, forecasting a significant surge in migration and its economic implications.