This article is from the Australian Property Journal archive
WITH the escape to the country trend reaching its end, population growth across the next two decades will be focused on Australia’s four biggest cities, continuing to put pressure on the current housing crisis.
According to research from PEXA’s .id, Australia’s national population is forecast to surge by 7.4 million by 2041 with two thirds of growth to be focused in Sydney, Melbourne, Brisbane and Perth.
The four largest states are set to receive 93% of Australia’s forecast population growth to 2041, with the four capitals receiving 67% of that total growth.
With Victoria’s population forecast for an additional 2 million people including 1.6 million in Greater Melbourne and requiring 723,000 additional dwellings.
While NSW’s population is forecast for another 1.7 million, including 1.2 million in Greater Sydney and requiring 582,000 additional dwellings.
Queensland is forecast to see a further 1.6 million with 1 million occurring in Greater Brisbane and requiring 381,000 additional dwellings.
While Western Australia is forecast for another 0.9 million with 0.8 million occurring in Greater Perth and requiring 334,000 additional dwellings.
To keep up with population growth, an additional two million dwelling across these cities will be required.
This comes after a five-year period of significant growth in the country’s regions, which was accelerated by the global COVID-19 pandemic and work from home trends.
The reopening of borders heralded in the return of urban population growth, which is now being driven by the availability of study and work opportunities and a higher concentration of people forming families in major cities.
“What we found was that the regional growth we’ve seen over the past few years was caused by an interruption to regular programming,” said Lailani Burra, CEO at .id.
“Where these areas typically lose population – predominantly young people, to larger cities – COVID and university lockdowns had put a halt to. So most of the growth was not from people coming, but from people not leaving these regional areas.”
Based on current conditions, this growth trend is expected to continue over the coming 25 years, meaning not only accommodation but infrastructure and services will need to be developed to keep up with changes.
“We often talk about population and housing challenges at the national, state or local government area level, but this work quantifies the impacts at the much more detailed suburbs/community/local area level,” said Burra.
“Overseas migration will continue to have a significant impact on the future of Australia, but it won’t affect every community in the same way.”
At the same time, both Tasmania and the Sunshine Coast are forecast to see an increased imbalance in population demographics.
With young people continuing to leave Tasmania as retirement aged people move into the state. While on the Sunshine Coast, the retirement aged population is set to triple over the coming 25 years.
The growth trend means the pressure on the housing market and the current crisis is unlikely to be alleviated in the near future.
NEW home commencements over the June quarter were lower than at any time in the last decade, with states falling behind on numbers needed to meet commitments to the National Housing Accord next year.
According to the latest ABS data, total dwelling commencements were down 11.8% to 40,720 dwellings over the quarter. It comes as economists warn that the federal government’s strengthened National Housing Accord – touted to deliver 1.2 million dwellings over five years – is “very unrealistic”.
The most recent National Housing Finance and Investment Corporation State of the Nation’s Housing report forecasted a national housing deficit of around to 175,000 by 2027, with around 59% of this deficit in the unit market.
While over the last decade, units have made up around 41.7% of total new housing completions nationally, the March quarter of this year saw units make up just 37.1% of completions, sitting about 27.1% below the decade average.
Meanwhile a recent study commissioned by Aware Super found a shortage of affordable housing for essential workers near their jobs in Australia’s capital cities is costing the nation $64 billion.
