Red-hot growth in population is underpinning massive housing demand in Victoria even as fears of oversupply in some areas of the Melbourne residential market intensify.
The latest ABS figures show that Victoria welcomed a record of 127,500 people (net) over the year to September 2016 as the state’s population increased by 2.1 per cent – far more than that of any other state.
Overseas migration was the biggest contributor, as a whopping 68,613 (net) new migrants came in.
There was also a natural increase (births less deaths) of 41,700.
Net interstate migration (17,185) also came in at record levels notwithstanding that this was a less significant contributor to the overall total that natural increase or overseas migration.
This – along with solid population growth in New South Wales and Queensland – suggests that many workers are returning home from the resource sector construction boom.
Whilst the figures do not dispel ideas about current levels of overbuilding, they do at least suggest that underlying housing demand throughout the state is red hot.
With Victoria’s average household size being around 2.54 people (2011 Census), a back of the envelope calculation would imply new demand for at least 50,000 new homes – and that’s not including the effect of new households being created as young people leave home.
Whilst that would be unlikely to entirely offset the whopping 68,000 odd homes upon which the Housing Industry Association estimates that ground broke last year, it does still imply that demand is at least very strong.
Furthermore, the strong overseas migration numbers should underpin reasonably high levels of demand among a cohort which may be more amenable to living in some of the multi-residential dwellings which are going up in Melbourne.
The numbers do, however, highlight the ongoing pressures upon housing affordability as the population rises.
Outside Victoria, population over the year to September grew by 1.5 per cent, 1.4 per cent and 1.4 per cent in the Australian Capital Territory, New South Wales and Queensland respectively.
Overall growth was solid in Western Australia despite almost 9,200 people (net) having migrated interstate over the past year but less strong in South Australia, Tasmania and the Northern Territory.