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National Economic Update POPULATION - LONGER TERM & NEXT DECADE

Like many advanced economies, People aged 21-35 People aged 36-50
Australia’s population is aging. While
this is pronounced at the national 1,600,000 1,600,000
level, it is also true that our largest 1,400,000 FY23 FY33 1,400,000 FY23 FY33
With so much noise and conflicting Against a backdrop of challenges costs and low on-market supply. cities are expected to skew young. 1,200,000 1,200,000
According to the latest Federal
emerging with inflation, rising
A wide consensus of forecasters,
expert opinion around what is interest rates and a slowing including the major banks, predict Government age cohort forecasts, 1,000,000 1,000,000
the largest growing age groups by
economy, we have seen an
prices to lift a little over 2023
happening in the property market, earlier than expected end to before more sustained and broad- both absolute size and increase over 800,000 800,000
the next decade will be aged 21-50
based lifts in 2024, once interest
the price correction in the
our analysts offer a clear picture established housing market. This rates track lower. Now more than in Sydney and Melbourne where an 600,000 600,000
estimated additional 800,000 people in
of the economic and demographic stabilisation can be attributed to ever it’s important to consider these age cohorts will require housing. 400,000 400,000
where we are at in the cycle, assess
a confluence of factors including
forces at play. At Mirvac we make our a surge in migration, very low the fundamentals and cast a Amongst these will be many renters, 200,000 0 200,000 0
first home buyers and upgraders. Perth
unemployment, high construction
longer-term perspective.
investment decisions based on solid and Brisbane are expected to see an Sydney Rest of NSW Melbourne Rest of VIC Brisbane Rest of QLD Perth Rest of WA Adelaide Rest of SA ACT Sydney Rest of NSW Melbourne Rest of VIC Brisbane Rest of QLD Perth Rest of WA Adelaide Rest of SA ACT
additional ~325,000 people in these
data, insights we believe should be age cohorts over the same period, large
numbers for cities of this size.
shared with our customers so that
your next real estate decision is an Sydney Melbourne Brisbane Perth
informed one based on fact. Nearer term economic forecasts are Following the resumption of While the Queensland economy The mild and brief pandemic
KATHY ARICI NATASHA RYKO ALEXANDRA GRAY slower than the boom period seen migration and a technical change to faces headwinds as the full impact disruptions in 2020 and 2021 have
National Sales Director National Marketing Director Head of Research in CY2022. Elevated inflation and the boundary, Melbourne overtook of interest rate rises materialises, meant that the reopening dynamics
rapid-fire RBA hikes are seeing an Sydney as Australia’s largest the recovery in net migration and have been less of a factor for Perth.
economy in transition. However, capital city. There is no looking population is a positive for Brisbane Population is growing and forecast
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POPULATION – NEAR TERM some key cushions remain and back from here with Melbourne in the longer term. to increase 1.7% in FY24. Over
are important drivers behind the
forecast to record the highest
the next four years, the state will
strength in the housing market. population increase of any city Queensland’s population growth welcome an additional 180,000
After almost two years of closed The 2023-24 Federal Budget » Sydney and Melbourne are Mirvac has always been a strong over the next decade. While the is higher than the state’s long-run people, most of whom will reside
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borders, Australia’s population forecast net overseas migration expected to account for around believer that urbanisation The unemployment rate in Sydney state’s post-COVID rebound is now average and above the national in Perth.
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boomed with the reopening in would reach a record 715,000 one in two of all new Australian will remain a strong driver of is currently below 3% - a strong giving way to slower growth from average. This has spurred an end
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January 2022. In the year to over FY23 and FY24 and close residents residential markets. While at starting point for the labour higher inflation and rate rises, the to weakness in the established This will be welcome news to
December 2022, the increase to 1.5 million in the five years to times this view was called into market – and though it is likely significant lift in hours worked, housing market seen in 2022, with employers given the state’s tight
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to Australia’s population was June 2027. This compares to a » A look back at migrant question during the pandemic and to rise over the year ahead it is over the past year and resurgence in Brisbane dwelling prices finding job market. Along with improved
the highest on record with the pre-pandemic decade average of settlement patterns shows the residential vacancy rates in some also expected to stay at low levels net migration inflows are important a floor in March 2023 and lifting housing affordability, this has
Australian Bureau of Statistics 1 around 225,000 per annum. In popularity of inner and middle key inner-city areas such as Green compared to history. The surge in supports. The broader pipeline to a 1% monthly increase by June contributed to Perth being less
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recording 496,800 new residents. terms of the locations that will ring locations. Our analysis of Square and Zetland in Sydney or international student numbers of non-residential construction 2023. Residential vacancy rates exposed to the 2022 established
Close to 80% of the increase was benefit from the inflow of migrants the locations of new overseas Docklands in Melbourne increased, and international tourist levels remains positive with a large round are very low with just 1% of stock dwelling price correction seen
from new overseas arrivals such we can look to both government migrants in the five years prior they have turned around quickly. continues to climb while an Aussie of public works providing a big available, marginally lower than on the east coast. While Perth
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as international students and forecasts and historic evidence: to the pandemic found: Residential vacancy rates swiftly dollar trading at July 2023 below boost to infrastructure workload. Sydney and Melbourne. is experiencing a slowdown in
temporary workers but the strong › 75% of new overseas migrants tightened back to pre-pandemic the US70c mark is a positive, There is now over $25bn in Supply: The decline in house economic activity from interest rate
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result was also due to fewer people » The Federal Government’s to NSW resided within 30km levels through 2022 and rents given it makes Sydney (Australia’s infrastructure work in the pipeline, construction continues to shape the rises, there are important supports.
leaving Australia. official forecast assumes close of the Sydney CBD 4 are tracking above 2019 levels largest service sector economy) and such as the commencement of Brisbane housing market. Oxford Deloitte Access Economics
to three in four new residents demonstrating the desirability NSW more attractive, competitive Economics expects the volume of analysis in June 2022 outlined
will choose to call Sydney, › 80% of new overseas migrants of locations for their liveability, destinations. State Government Melbourne’s massive North-East new houses will reduce by greater $32bn of investment projects
Melbourne, Brisbane and to Victoria resided within amenity and access to employment. capital expenditure is forecast to link, featuring 6.5km of tunnels, than 20% , from a peak in 2023 to under construction and $20bn of
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Perth home 3 30km of Melbourne CBD 4 step up to record levels. While nearly doubling the value of work. early 2026. While apartment supply committed capital expenditure. An
state infrastructure pipelines Overall, the resurgence in has not improved for some time, additional $100bn of projects were
have been commonplace for some population growth is the key it’s worth noting that the volume under consideration or possible.
time, public capital expenditure is support to activity. ABS estimates of new apartments in early 2025 in Supply: The supply-demand
set to average $29.2bn annually show annual growth likely to be Greater Brisbane is expected to be balance remains tight with sales
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By FY24, three in four new Australians over the four years to June 2026, a strong 2.5% over the year in around 70% lower than the peak in the established market running
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early 2023, well above the State
an unprecedented level in
are again anticipated to reside in Sydney, NSW history. Government’s previous forecasts of 2018. a long way ahead of new listings
and stock of unsold dwellings
Melbourne, Brisbane or Perth with one in Supply: Sydney is facing a very low of 1.4%. dwindling. Consumer sentiment
housing supply outlook. Over the
towards Perth dwelling price
Supply: Over the next 2-3 years
two calling Sydney or Melbourne home. next two years, Oxford Economics Oxford Economics expects the expectation was the highest of all
forecasts the number of new houses volume of new houses to reduce Australian cities in June 2023,
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to fall by ~40% and a decrease in by close to a third from mid-2023 indicating locals expect prices to be
75% of new overseas migrants to NSW 80% of new overseas migrants to Victoria As such, the volume of new Sydney the volume of new high-rise of quality new housing is behind
higher in the year ahead. A shortage
to early 2026. Meanwhile
high-rise apartments of ~30%.
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apartments is barely lifting and
dwellings completing in 2025 will
this – the latest dwelling approval
reside within 30km of Sydney CBD
reside within 30km of Melbourne CBD
be around the same levels seen in
house approvals down 22% over the
last seen in 2012-2013.
2013/14 when population growth is expected to remain at levels numbers for WA showed detached
was much lower. past year to May 23 and high-rise
Source references: 1 ABS, National, state and territory population, Dec 2022. 2 Federal Budget papers 2023-24. 3 Centre of Population 2022 Population Statement. 4 ABS Overseas Migration SA2 FY15-FY19. 5 ABS, Labour Force, apartment approvals down 21%.
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Australia, Detailed, May 2023. 6 NSW State Budget Papers. 7 March 2023 forecast. 8 SMH, https://www.smh.com.au/national/melbourne-tops-sydney-as-australia-s-biggest-city-on-a-technicality-20230413-p5d04g.html. 9 State
budget papers. 10 ABS Labour Force population estimates. 11 CoreLogic. 12 Federal Budget Papers 2023-24. 13 Westpac-Melbourne Consumer Sentiment June 2023. 14 ABS Building Approvals, May 2023
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