Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

Demographics

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A concentration of growth in the NSW and Victorian economies and in service industries will continue to support occupier demand and outperformance in the Sydney and Melbourne property markets in FY17, according to Dexus Property Group's latest quarterly report.
Key assumptions affecting the near-term outlook include:
NSW and Victoria will solidly outperform other states based on population growth and infrastructure spending. Queensland is forecast to improve, while WA will continue to lag.
<a href="/images/2016/10/28/Figure%201.jpg" target="_blank">Click to enlarge</a>
<ul>
<li><img src="/images/2016/10/28/Figure%201.jpg" alt=""></li>
</ul>
Official cash rate to remain unchanged over the next 6 months with a bias to move lower in 2017.
Residential construction activity is expected to slow and could be a key risk to growth (FY18- FY19) if it slows more sharply than forecast.
<a href="/images/2016/10/28/Figure%202.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/28/Figure%202.jpg" alt="">
Employment growth is positive, but the rate of growth is slowing with a continued shift from full time to part time jobs.
Service sector activity (such as education, health, IT, tourism and business) will remain a growth driver for the economy. Growth will be higher for small to medium businesses than large businesses.
The property markets of Sydney and Melbourne are forecast to show positive occupier demand over the next 12 months with mixed demand elsewhere.
<a href="/images/2016/10/28/Table%201.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/28/Table%201.jpg" alt="">
Bond yields are expected to stablise at/near current levels and rise at a slower rate than in the US over the medium term, staying low by historical standards.
Property yields are expected to remain at low levels for a considerable time unless there is an external shock or disruption to capital flows.
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Population growth to help NSW and Victoria property outperform: Dexus

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Underlying demand for new dwellings is driven primarily by population growth which, at the state level, is a combination of an increase in births less deaths and net overseas and net interstate migration flows, according to QBE’s latest housing report.
The demand from net overseas and net interstate migration is more immediate because this group typically requires accommodation upon arrival, be it owner occupied or rental. Net overseas migration refers to the balance of arrivals to, and departures from, Australia. To be included in this calculation, an arrival is counted if they are resident in the country for 12 out of 16 months.
Long term arrivals – which predominantly comprise people on student or skilled temporary subclass 457 visas – surged to an annual record of 516,000 in the year to March 2013. Solid employment growth in mining sector related industries resulted in a re-emergence of skills shortages which underpinned the rise in long term overseas visitors.
Although arrivals from overseas were at record levels in March 2013, departures from Australia were also increasing, with the net effect that net overseas migration was below the record levels set in 2008.
Since the second half of 2013, long term arrivals have contracted in response to the slowing conditions in the Australian economy. There has been a decline in work–related visas such as subclass 457 visas as the reduction in the resource sector investment leads to diminished employment opportunities.
Long term departures are on the increase as temporary migrants return to their country of origin upon expiry of their visas. Net migration from New Zealand has also declined in this period because its economy has improved relative to Australia.
With the decline in annual net inflow from long term arrivals, net overseas migration has decreased to an estimated 155,000 at June 2016. Falling arrivals and increasing departures, due to the lack of opportunities for temporary migrants to extend their stay, is forecast to continue, taking net overseas migration to a low of 140,000 in 2017/18 and 2018/19.
While lower than recent peaks, this figure is elevated in a long term sense, being higher than most years through the 1990s and early 2000s. There may be some upside to these forecasts.
Strong growth is occurring in international student enrolments, with the number of overseas students commencing courses in Australia increasing by 42% in the three years to 2015/16, and net overseas migration could be higher if many elect to stay on.
Average annual net overseas migration over the 2016/17 to 2018/19 period is forecast to be lower across all states (with the exception of the Australian Capital Territory) than the long term 1999/2000 to 2015/16 average.
The largest declines are expected to be in the states where net overseas migration inflows have been high as a result of skills shortage generated by booming resource sector investment.
<a href="/images/2016/10/14/Chart%2013.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/14/Chart%2013.jpg" alt="">
The forecast share of national net overseas migration in Western Australia (8.0%), Queensland (12.0%) and Northern Territory (0.5%) over 2016/17 to 2018/19 will be significantly lower than their long term average.
Weak employment prospects as mining investment continues to decline will encourage more overseas migrants to settle in the other states, while overseas migrants employed on temporary working visas are increasingly returning home as projects wind up.
Growth in overseas migration into New South Wales and Victoria lagged that of the resource states during the mining investment boom. As a result, the states are not experiencing rising outflows of temporary workers. Moreover, with the strongest performing state economies, these states are also attracting a greater share of arrivals.
The states are forecast to attract an average 40.1% and 31.3% of Australia’s net overseas migration respectively between 2016/17 to 2018/19; higher than their long term average share. The Australian Capital Territory is also forecast to attract an increased share of national net overseas migration.
Overseas students look to be one of the few components of net overseas migration to increase. Australian National University has a large overseas student population, which has an influence in a smaller city such as Canberra.
As with New South Wales and Victoria, net overseas migration into South Australia and Tasmania was also behind the resource states.
With economic conditions remaining challenging in these states, their share of national net overseas migration over 2016/17 to 2018/19 is forecast to be similar to their recent average since 2007/08 (6.0% and 0.7% respectively).
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Overseas migrants in decline: QBE Housing Outlook

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Singles earning an average income have been priced out of the property market from nearly all of Australia’s capital cities, a new report shows.
An analysis by financial comparison website RateCity.com.au shows that Hobart and Adelaide remain the last affordable capital cities for the nation's singles with a salary of $59,441 and $72,529 needed respectively to afford repayments on a 30-year mortgage (with a deposit of 20% at today's average variable rate of 4.74%). The industry rule that no more than 30 percent of a person’s income should go towards housing costs was applied to arrive at the figures.
The east coast remains the most unaffordable, with Sydney topping the list of tough markets for singles to crack. A person wanting to buy in the harbour city needs a six-figure salary of $137,556 to comfortably fund a mortgage on a median-priced house.
Someone looking to buy in Brisbane or Melbourne would require an $80,866 and $96,706 salary respectively to afford a median priced house, while in Canberra the salary needed would be $97,756.
According to Peter Arnold, data insights director at RateCity.com.au, the report raises further concerns that rising property prices across many cities in the country are forcing Australians out of the market. This could fundamentally impact the nation's demographics and service needs in the years ahead, he said.
“Our analysis reveals a reality that many young Australians are now living; the impossibility of affording a median-priced house on an average salary in most capital cities,” Arnold said.
“Without a partner or family member to share mortgage costs with, the numbers paint a grim picture for millennials, many of which may be squeezed out. Even as part of a couple, east coast property prices are out of reach for many Australians.”
“Many first home buyers, including young families, may find that they have to move away from careers in the CBD and the support of families to more affordable parts of Australia. This could have long-term effects on Australian society and bring with it challenges for the future in many areas, including transport and childcare.”
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Singles priced out of property market: RateCity research

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The lower dollar continues to work away on Arrivals and Departure trends, with a further +1.8 per cent seasonally adjusted increase in the number of short term arrivals in November, and a -2.8 per cent decrease in the equivalent number of departures.  
The monthly ratio of short term departures this continues to decline, which will act as a twin boost for the domestic economy.
<img class="aligncenter img-responsive" src="https://2.bp.blogspot.com/-b73svb4ZFPU/VpUnsI93FyI/AAAAAAAAak0/7_yWcorhIAA/s640/A2.jpg" alt="" width="640" height="320">
The labour market is not presently strong enough to warrant the exceedingly high level of net permanent and long term immigration seen in 2013 of above 400,000.
The rolling annual figure is now seemingly getting set to stabilise – in November the rolling annual total ticked down slightly from 278,200 to 277,600, with the decline being felt most keenly in the resources states and the regions, as opposed to the largest capital cities.
 
<img class="aligncenter img-responsive" src="https://3.bp.blogspot.com/-O7WpgUtq3xE/VpUnsHJlouI/AAAAAAAAaks/zY07p-aR25M/s640/A1.jpg" alt="" width="640" height="322">
 
The most recent <a href="https://petewargent.blogspot.sg/2015/12/students-to-drive-population" target="_blank">forecasts</a> from the Department of Immigration &amp; Border Protection (DIBP) show that the population growth rebound for the remainder of this decade will be driven by international students rather than by immigrants on 457 or permanent resident visas.
<h4>RECORD CHINESE TOURISM</h4>
The annual number of short term arrivals into Australia surged to a new record high of 7.36 million in November.
There have been significant increases in the number of visitors from India (+19 per cent) and the United States (+9 per cent) over the past year, Americans doubtless encouraged by favourable shifts in the exchange rate.
There can no doubting the key trend here, however, which has been the vast +17 per cent increase in the number of visitors from China, Hong Kong and Taiwan to 1.36 million.
The pace and scale of the increase over the past decade has been breathtaking, as documented regularly on this blog.
 
<img class="aligncenter img-responsive" src="https://4.bp.blogspot.com/-7I2RT3jAbrU/VpUns-kh5eI/AAAAAAAAak4/zg5drP4jalk/s640/A4.jpg" alt="" width="640" height="328">
For the first time China alone accounted for more than 1 million visitors in the year to November, and make no mistake, Chinese tourists spend up big when they come to Australia.
<h4>STUDENTS</h4>
A record 3.38 million persons came to Australia for a holiday over the year, while for the first time this year more than 2 million cited there reason for journey as “visiting friends and relatives”, reflective of Australia’s status as a country built on immigration.
 
<img class="aligncenter img-responsive" src="https://4.bp.blogspot.com/-Z1Fex7hVrZI/VpUnsNsACqI/AAAAAAAAakw/40K-WQd6p_0/s640/A3.jpg" alt="" width="640" height="326">
 
The other key trend to watch this year is the explosion in the number of international students, not least because following a streamlining of the acceptance rules so many are expected to go on to become permanent residents on other visas.
This data series confirmed that the rolling annual number of education arrivals jumped by an unprecedented +71,200 or +18 per cent to 464,600 in the year to November.
 
<img class="aligncenter img-responsive" src="https://3.bp.blogspot.com/-ZSAHnIJp5Ec/VpUns7Fo29I/AAAAAAAAak8/Bhsg-ejlFSg/s640/A5.jpg" alt="" width="640" height="312">
 
Most students are projected to be accepted into the large capital cities.
Pete Wargent is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and blogger.
 
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How the dollar is driving demographic trends for property investors: Pete Wargent

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GUEST OBSERVATION
Buying a property is a complex process with many decision points along the way, regardless of whether you are buying to live in or to rent out. A very important part of that decision process is deciding where to buy, and what type of property in particular.
There will be those rare occasions when the buyer just sees a property for the first time, either in real life or just on a picture, and immediately knows “this is it”.
However, more often than not, the selection of a property for purchase is an elimination process whereby you firstly exclude what you don’t want, and then evaluate and rank what is left to arrive at the final decision.
In either case, the more time one spends learning about various property options and getting to know the peculiarities of the local market, the better the chance of spotting that ‘perfect opportunity’ - or at least making the selection process a more logical exercise, and hence less stressful.
There is a large variety of property market information available to individuals. Some information is accessible for free online as part of marketing activities of various real estate related web sites (such as the suburb data available on this site), while other requires payment of hefty fees to access.
Although Australian Census data may not be at the top of the list of the most popular information sources to consult when buying a property, it is a great resource that should be seriously considered as a starting point in the purchasing process.
The key advantage of using Census data in property market research is that it allows you to quickly narrow the choice of locations to concentrate your further, more-detailed research on. Hence, it allows prospective buyers to make their research more focused, and subsequently, a much cheaper and much faster exercise.
After all, as any real estate agent will tell you, buying a property is about ‘location, location, location’. So, defining ‘where’ to start looking should always be a priority.
Sales reports for suburbs or postcodes that list recent transactions provide prospective buyers with good insights into the price distribution in a given location and at a given time but can be quite expensive to obtain. These are great for the final stage of your research when you are comparing between specific offerings on the market and assessing whether what you are interested in is good value in relation to other recent sales in that location.
However, considering there are a few hundred suburbs or postcodes per capital city, accessing all that information would be prohibitively expensive. Not to mention impractical if it is delivered in a pdf report format.
Therefore, tools that allow analysing and mapping data across whole regions offer much more utility in the early stages of the research.
Let’s review a few examples of simple maps with data from the latest 2011 Census of Population and Housing to illustrate the value of such information for deciding on where and what to buy. We will focus on Sydney and will use postal areas as a geographic reference.
Census data was current as at 6 August 2011 so it may appear a bit dated in 2015. However, in this analysis we are primarily interested in the relative differences between areas rather than absolute values, therefore the age of data is not so important, as long as it is reasonably recent.
The obvious choice in starting the analysis would be to look at median mortgage payments per postcode – this acts as a quick reference to the distribution of prices across the city. The map below gives a good indication where the expensive and not so expensive parts of Sydney are.
Click on maps to open in new window and view suburbs in more detail.
 <a href="https://www.propertyobserver.com.au/https://mapdeck.com/409" target="_blank"><img src="/images/2015/04/29/median_morgage_monthly_b.png" alt=""></a>
However, using this dataset alone will not allow you to distinguish between areas with lots of new mortgages (hence high mortgage payments) and those with expensive but mostly paid-off properties (that is, with smaller remaining mortgages).
Therefore, median rent data provides a much more useful picture since rental costs and the cost of buying a property are closely related (see my previous article titled “<a href="/expert-insights/australian-property-prices-explained-independent-analyst">Australian property prices explained</a>” for the explanation of this concept).
<a href="https://www.propertyobserver.com.au/https://mapdeck.com/410" target="_blank"><img src="/images/2015/04/29/median_rent_weekly_b.png" alt=""></a>
Using the map like the one above, you can determine areas around the city with similar property prices. For example, if you have identified one area with properties in your price range, by locating polygons shaded in the same colour you can easily identify neighbourhoods that have similarly affordable properties.
Price affordability is one factor affecting the choice of location but how desirable is the neighbourhood is another important consideration in the purchase decision. You could try to assess the attractiveness of the neighbourhood based on the rate of unemployment or family incomes but the best summary measure is The Index of Relative Socio-economic Advantage and Disadvantage which summarises information about the economic and social conditions of people and households within an area.
For example, a low score indicates relatively greater disadvantage and a lack of advantage in general. That is, these are locations with many households with low incomes, or many people in unskilled occupations and few households with high incomes, or few people in skilled occupations.
<a href="https://www.propertyobserver.com.au/https://mapdeck.com/411" target="_blank"><img src="/images/2015/04/29/seifa_advantage_disadvantage_b.png" alt=""></a>
It is all well and good to follow advice to “buy in the West” because it is cheaper and prices have the potential to rise more than in the East over the next few years (this pattern of price growth was explained in my earlier article “<a href="/expert-insights/investing/inner-ring-the-best-bet-in-sydney-and-heres-why">Inner ring the best bet in Sydney and here's why</a>”) but the decision has to be balanced with the risk that it will be much harder to sell or rent out in those locations when the going gets tougher.
Furthermore, as an investor, you may be interested primarily in locations with high concentration of rental properties which indicate high demand for rental accommodation. Whereas, owner-occupiers may prefer to avoid areas with excessive stock of rental accommodation.
<a href="https://www.propertyobserver.com.au/https://mapdeck.com/412" target="_blank"><img src="/images/2015/04/29/rented_dwellings_b.png" alt=""></a>
Landlords cannot and should not discriminate against families with young children but those who would like to reduce the risk of excessive wear and tear of their rental properties could use Census data to pick locations where probability of this type of tenant is reduced.
<a href="https://www.propertyobserver.com.au/https://mapdeck.com/413" target="_blank"><img src="/images/2015/04/29/kids_0_4_years.png" alt=""></a>
And how crucial is a parking space if you are buying an apartment to rent out? Sure, it is great if there is one included in the purchase price but for many locations along major train lines and arterial roads where 30% or even 50% of households do not have a car, lack of parking space should not be a deal breaker.
<a href="https://www.propertyobserver.com.au/https://mapdeck.com/414" target="_blank"><img src="/images/2015/04/29/no_motor_vehicles_b.png" alt=""></a>
Finally, consulting Census data can also help prospective buyers as well as existing landlords to assess the potential of specific locations for group rentals which can significantly boost rental yields by maximising income from the asset.
<a href="https://www.propertyobserver.com.au/https://mapdeck.com/415" target="_blank"><img src="/images/2015/04/29/group_households_b.png" alt=""></a>
Census data cannot provide all the answers but it is of great help in the property selection process as it offers a fast way to narrow your search options to a handful of locations to then focus your more detailed research on. Using Census statistics will save you money and valuable time in arriving at the optimal selection for purchase.
Arek Drozda is an independent property market analyst.
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Improving property selection with Census data: Arek Drozda

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GUEST OBSERVATION
The Australian Bureau of Statistics has just released its annual update on regional population growth. The combined growth of Australia’s capital cities of 1.9% for the year ending 30 June 2014 is above the national growth rate of 1.6%. I’ve analysed the data of Australia’s 550 local government authorities to find the population hotspots.
<img src="/images/2015/04/07/Aust_PopulationGrowth_2013-14.JPG" alt="">
At a greater capital city level, Perth continues its status as Australia’s fastest growing city with a growth rate of 2.2%. Perth recently became Australia’s fourth city with a population in excess of 2 million people.
Melbourne and Darwin both had growth rates of 2.2%, ahead of Sydney (1.8%) and Brisbane (1.7%). Canberra (1.2%), Adelaide (1.0%) and Hobart (0.6%) continue their trend of being Australia’s slowest growing capital cities.
Of more interest is some of the data at local government level. The fastest growing population in Australia last year was the shire of Serpentine-Jarrahdale, at the southern urban footprint of Perth. With a population of 22,698 its rate of growth for the year was 6.2% - more than three times the national average.
The south-west Sydney shire of Camden was a close second with a growth rate for the year of 6.1%.
Casting our eyes across the nation revealed these other population hotspots:
<ul>
<li>The regional standout was Busselton, in the far south of Western Australia with a growth rate 3.7%, followed closely by the central Queensland industrial powerhouse of Gladstone with 3.5%; 
</li>
<li>The famous Western Australia wine region of Augusta-Margaret River experienced a 3.4% population growth (twice the Australian average) while the gas city of Karratha in the state’s north grew by 2.9% over the year; 
</li>
<li>While South Australia’s total population growth was only 1%, regional towns Gawler (2.8%) and Mount Barker (2.1%) produced surprising results; 
</li>
<li>A thirst for higher density living in Sydney drove population growth in Botany Bay (3.4%), Canada Bay (3.0%), Strathfield and Parramatta (both 2.9%); 
</li>
<li>Regional New South Wales towns of Yass Valley (2.3%) and Maitland (2.2%) were well above the national average; 
</li>
<li>Victoria’s population growth numbers is consistent with its urban sprawl strategy. Wyndham (outer-south-west 5.6%), Whittlesea (outer-north 4.4%), Melton (outer-west 4.0%), and Cardinia (south-east 3.6%) all produced big numbers. 
</li>
<li>The historic goldfields town of Ballarat with a population of 100,000 produced 1.7% growth; 
</li>
<li>In Queensland, Somerset (3.0%), Scenic Rim / Beaudesert (2.9%), and Ipswich (2.8%) were strong. The population of Australia’s single biggest local government, Brisbane City Council, grew by 1.5%</li>
</ul>
Simon Pressley is managing director of Propertyology, a REIA Hall Of fame Inductee, property market analyst, accredited property investment adviser, and buyer’s agent.
 <a href="https://www.propertyology.com.au/more-than-a-buyers-agent/" target="_blank">Propertyology works exclusively with property investors</a> to purchase properties in strategically chosen locations all over Australia.
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Australia's population hotspots: Simon Pressley

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The Australian Bureau of Statistics (ABS) released its demographic data for the September 2014 quarter last week. The data showed that over the quarter, Australia’s population was recorded at 23.581 million persons having increased by 1.5% or 354,605 persons over the past year.
<img class="aligncenter size-full wp-image-4440" src="https://blog.corelogic.com.au/wp-content/uploads/2015/03/Chart-13.jpg" alt="Chart 1" width="500" height="184">
The increase in population over the past year was actually the lowest increase in national population over a year since the 12 months to December 2011. Looking at the components of the national population increase, natural increase (births minus deaths) accounted for a 150,721 person increase in population and net overseas migration contributed to a 203,884 person increase. 
The 150,721 person natural increase was the lowest annual increase since the 12 months to March 2007 while the additional 203,884 persons due to net overseas migration was the lowest since September 2011. As the first chart shows the sharp slowdown in net overseas migration in particular is having a big impact on the overall national rate of population growth.
<img class="aligncenter size-full wp-image-4441" src="https://blog.corelogic.com.au/wp-content/uploads/2015/03/Chart-22.jpg" alt="Chart 2" width="500" height="190">
Looking at population growth across the states, the annual increase in population was greatest in New South Wales (106,365), Victoria (102,021), Queensland (69,423) and Western Australia (53,691). Annual population growth was much lower over the year in South Australia (14,303), Australian Capital Territory (4,403), Northern Territory 2,765) and Tasmania (1,602). Over the past year, 58.8% of total population growth occurred in NSW and Vic. 
If you add Qld and WA, those four states account for 93.5% of total national population growth. In terms of the rate of annual population growth, it is currently strongest in WA (2.1%), Vic (1.8%), Qld (1.5%) and NSW (1.4%). Elsewhere, the rate of annual population increase was recorded at 0.9% in SA, 0.3% in Tas, 1.1% in NT and 1.2% in ACT.
Although the population of each state is continuing to grow, the rate of growth has slowed across the board.
 In NSW the annual increase in population was the lowest since June 2013, in Vic it was the lowest since March 2013, in Qld it was its lowest since September 2001 and in WA it was at its lowest level since September 2010. 
Across the remaining states and territories the rate of population growth in SA was its lowest since September 2011, in Tas it was its lowest since March 2014, in NT it was higher than the previous quarter but lower over the year and in ACT it was at its lowest level since September 2006.
If we look at the components of population growth at the state level we get even further insight into the trends taking place. 
<img class="aligncenter size-full wp-image-4442" src="https://blog.corelogic.com.au/wp-content/uploads/2015/03/Chart-32.jpg" alt="Chart 3" width="500" height="182">
Natural increase is basically a function of the overall population size and as a result natural increase is much greater within the largest states. Over the 12 months to September 2014, the natural increase was recorded at 43,069 persons in NSW, 36,794 in Vic, 34,603 in Qld, 6,932 persons in SA, 21,210 persons in WA, 1,503 persons in Tas, 2,882 persons in NT and 3,706 persons in ACT.
<img class="aligncenter size-full wp-image-4443" src="https://blog.corelogic.com.au/wp-content/uploads/2015/03/Chart-42.jpg" alt="Chart 4" width="500" height="183">
Turning to net overseas migration, overseas migrants are finding NSW and Vic the most attractive states in which to settle. Over the 12 months to September 2014, 62.0% of the net gain from overseas migration was recorded in NSW and Vic. Across the individual states the net overseas migration was greatest in NSW (69,601), Vic (56,772), WA (32,190) and Qld (28,878). Across the remaining states and territories net overseas migration was recorded at: 10,304 in SA, 1,065 in Tas, 3,266 in NT and 1,798 in ACT. NSW and Vic have always attracted the greatest number of overseas migrants however, as the chart shows the gap has widened significantly over recent quarters.
<img class="aligncenter size-full wp-image-4444" src="https://blog.corelogic.com.au/wp-content/uploads/2015/03/Chart-52.jpg" alt="Chart 5" width="500" height="182">
The profile of interstate migration has also changed significantly over recent years. Qld has historically been the powerhouse in terms of interstate migration however, Vic has now taken that mantle. Over the 12 months to September 2014 only Vic (8,455), Qld (5,942) and WA (291) recorded positive net interstate migration. On the flipside, each of NSW (-6,305), SA (-2,933), Tas (-966), NT (-3,383) and ACT (-1,101) recorded a net loss of residents to the other three states. This data set is published from 1981 onwards and over that time NSW has always recorded a net loss of residents to other states and territories however, the outflow is currently at a record low. In Vic, the inflow eased slightly from a record high over the previous quarter. Across the other states and territories, Qld net interstate migration is hovering around the lowest level on record, WA interstate migration is at its lowest level since September 2003 and the outflow of residents to other states and territories in NT is at a record high.
The data highlights an overall slowing of the rate of population growth which will undoubtedly have an impact on the wider economy. Economic growth is slower than it has typically been over the past 2 decades and is extremely weak on a per capita basis, lower population growth may exacerbate the slowing of economic growth. Dwelling approvals and construction are at record high levels, as we know over the past decade there hasn’t been an ample supply of new housing. The heightened level of construction will go some way to alleviating housing shortages however, it would take a number of years of heightened construction to totally rectify the shortage.
Looking at the data, the rate of population growth has slowed and the fall has been most noticeable across net overseas migration. Those migrants who are coming to Australia are favouring settling in NSW (Sydney) and Vic (Melbourne). This is creating further demand for housing in these cities, so too is the fact that Vic now has the highest net interstate migration of any state and the outflow of residents from NSW is at a record low level. 
Given this, it is easy to see the impact demographics are having on the housing markets and why Sydney and Melbourne are seeing much greater housing demand and housing value growth. Fewer people are leaving those cities, more people are coming from interstate and most coming from overseas are choosing to settle in our two largest cities. On the other hand population growth has slowed significantly in other capital cities, fewer residents are leaving NSW and Vic to settle in these states and territories and they are attracting fewer overseas migrants.
With population growth now showing a consistent slowdown since the end of 2012 and new housing supply showing a consistent increase since late 2011, the gap between housing supply and demand has significantly narrowed. It is reasonable to assume that higher supply levels and lower housing demand will eventually dampen the exuberant housing market conditions that are so evident in Sydney and to a lesser extent in Melbourne. It is important to note that to-date the supply-side response has been nowhere near as strong in Sydney as it has been across most other capital cities.
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The rate of population growth remains strong but continues to slow: Cameron Kusher

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GUEST OBSERVATION
The old adage is that it is time in the market, not market timing. And that adage certainly applies to the wealth of Australians. Not only has household wealth levels lifted to fresh record highs but generational-low interest rates are also reducing borrowing costs across an array of sectors.
The global financial crisis caused the biggest ever drop in wealth for Australian households, however wealth levels have been repaired over the past couple of years and have hit new highs. In short, we aren’t as badly off as it may seem. Average financial wealth per person stands at just over $333,000.
Australia’s financial wealth lifted by almost $190 billion in the December quarter. Interestingly the improvement in wealth levels and low interest rate environment over the past year has supported a lift in consumer activity. Interestingly almost 23% of total household assets are being held in cash and deposits - well above the decade average of 20%.
As the Reserve Bank has highlighted on many an occasion, the improvement in household balance sheets certainly bodes well for future spending. And given that a low interest rate environment is likely to be part of the economic landscape over the coming year, it is likely to see households continue to invest in other asset classes and spend a little bit more freely.
The strength in share markets has certainly been the key driver of the turnaround in wealth and more importantly the pickup in wealth is expected to continue. We expect an ongoing improvement in wealth over coming quarters. The cheap cost of debt will support corporate Australia and over the coming year as the economy lifts, we expect Aussie businesses (outside of mining) to feel more confident to kick-start investment plans.
Australian superannuation funds are holding well over one and a half times the ‘normal’ proportion of money in defensive assets like cash and bank deposits. That is not to say that super funds have not been investing in equity markets, rather that equity investments have been less than the cash inflows recorded by fund managers. The risk for fund managers is being caught with too much money on the sidelines while equity markets track higher. With term deposit rates offering lower returns than growth assets, it is likely pension funds will allocate a larger proportion of inflows to listed property funds and equity markets
Population growth is healthy although in recent quarter it has eased – largely due to a slowdown in migration. Importantly population growth is still amongst the fastest across the OECD nations and as such more people coming to Australia means greater demand for houses, cars and retail items. Clearly faster population growth is good news for builders and retailers.
Some people aren’t convinced that faster population growth is a good thing. It is all about striking the right balance. If we need more workers and we can’t get them locally, it makes sense that we bring them in from abroad. It is vital that supply and demand for workers is brought into balance.
An ongoing lift in migration is also positive from a longer-run point of view in that it flattens out the ageing profile. We will need more in the way of younger people over time to support the growing ranks of pensioners.
What do the figures show?
Total household wealth (net worth) stood at a record $7,884 billion at the end of December 2014, up $189.7 billion or 2.5% over the quarter. In per capita terms, wealth rose to a record $333,061 in the December quarter, up $6,769 over the quarter. In real terms, the value of land and dwellings rose by $85.6 billion in the December quarter while financial assets rose by $41.8 billion. Net saving plus real wealth rose by $160.5 billion in the quarter. Households held a record $903.1 billion in cash and deposits at the end of December. Cash and deposit holdings represented 22.8% of financial assets, above the decade average of 20%. Pension fund (superannuation fund) assets rose by $52.7 billion to $1,721.3 billion in the December quarter. Cash and deposits stood at 15.0% of financial assets, still well above the long-term average of 9.3%.
Foreign holdings of Australian sharesrose by $10 billion in the December quarter to a record $731.6 billion. Foreigners held 46.3% of Australian listed shares at the end of December, down from 47.0% in the September quarter although above the long-term average of 42.7%.
Australian non-financial private companies held $431.7 billion in cash and deposits at the end of December. Cash and deposits were 40.5% of all financial assets in the quarter, down from 41.1% of financial assets in the September quarter and below the 14-year high of 42.5% recorded in the September quarter 2013. The long-term average is 37.4%.
Population Statistics:
Australia’s population expanded by 354,600 people over the year to September 2014 to 23,581,000 people. Overall, Australia’s population growth rate eased from 1.58% to 1.53% – a three year low.
Australia’s population grew by 90,300 people over the September quarter. Population growth hit a 5-year low of 1.39% in the year to March 2011 before lifting to 1.78% in December 2012 and has since eased to now hold at a three year low.
A total of 203,900 people migrated to Australia over year to September, well off the low of a gain of 172,100 in the year to December 2010. The record high was 315,700 in-bound migrants over the year to December 2008.
There were 303,100 babies born in the past year, just shy of the record 312,200 births in the year to September 2013. And deaths (152,200) were at a record high.
Over the past year population growth was the strongest in Western Australia (2.12%) followed by Victoria (1.77%), Queensland (1.49%), NSW (1.43%), the ACT (1.15%), Northern Territory (1.14%), South Australia (0.85%), and Tasmania (0.31%).
Population growth is above decade averages in just NSW (17% above decade averages) and Victoria (4% above decade averages). Population growth eased in the Tasmania over the September quarter, but growth had lifted for the prior eight straight quarters after hitting 12 year lows in September 2012. Population growth in Queensland was at a 15-year low and in the ACT was at an eight-year low.
What is the importance of the economic data?
The Australian Bureau of Statistics releases the Financial Accounts publication each quarter. The data covers assets, liabilities and financial flows for the key sectors of the economy. Figures on financial wealth help reveal the true state of household finances.
Demographic Statisticsare issued by the Bureau of Statistics each quarter. The figures include estimates of births, deaths, in-bound and out-bound migration movements and estimates of population change by State.
The Australian Bureau of Statistics (ABS) and Federal Treasury release the Modellers’ Database each quarter. The ABS notes: “the Modellers' Database consists of over 500 quarterly times series constructed from the NIF and TRYM econometric models. They are useful to economists, econometricians, financial analysts and students.
What are the implications for interest rates and investors?
Household and company balance sheets remain strong, and it is likely that more money will be put to work in the low interest rate environment over the coming year.
The Reserve Bank would be hoping that the lift in wealth levels continue to entice consumers and businesses to spend a little bit more freely – driving activity and helping to absorb the weakness in mining investment. Interest rates are still likely to fall over the next couple of months. We expect the Reserve Bank to cut interest rates in May.
The slowdown in population growth is having a detrimental effect on some states. Queensland and the ACT are amongst the weaker states when it comes to activity and growth levels and the result also shows up in the latest population statistics. Population growth in Queensland is holding at a 15-year low, and partly explains the contraction in economic growth over the past two quarters.
Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.
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Population growth is all about striking the right balance: Craig James

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I recently <a href="https://petewargent.blogspot.com.au/2015/02/australia-23750000" target="_blank">looked here</a> at how Australia's population increased from just 15 million in 1981 to more than 23.75 million today.
If you look closely you will see that the rate of population growth began to accelerate through the mining boom.
<img src="https://2.bp.blogspot.com/-jsW8asScJ4s/VOL4RMMnsHI/AAAAAAAATKc/MZxB5ny-jcY/s640/ABS%2BPOPULATION.jpg">
Last week saw the Treasury release of the fourth <a href="https://petewargent.blogspot.com.au/2015/03/aussie-investing-until-2055" target="_blank">Intergenerational Report</a> ("IGR") which showed Australia's population as being projected to increase to just shy of 40 million over the next four decades.
<img src="https://3.bp.blogspot.com/-ORinnuJ7Hb0/VPjv5nNgWKI/AAAAAAAATls/9jzrEwmTBqc/s1600/Population%2Bto%2B39.7%2Bmillion.jpg">
However, as <a href="https://petewargent.blogspot.com.au/2015/03/aussie-investing-until-2055" target="_blank">I wrote in this blog post last week</a>, the report seemed to be based upon a number of dubious assumptions and the projections in my opinion seemed far too low.
Why these projections are too low
In the absence of immigration, as life expectancies increases Australia would be set to be characterised by a problematic ageing population.
By 2055, life expectancy at birth is projected to be more than 95 years for men and more than 96 years for women, while there are projected to be approximately 40,000 people aged over 100, which is a huge increase.
A greater proportion of the population will also be aged 65 and over and the number of Aussies in this age group is projected to more than double by 2055 compared with today.
Given this it seems most unusual that the projections used in the IGR were based upon net overseas migration gently sliding all the way back down to just 0.5% per annum as a%age of the population over time.
<img src="https://2.bp.blogspot.com/-EClWzBrl3Y0/VPjv4nvcz0I/AAAAAAAATlU/ZMeLvqgctv4/s1600/Net%2B%2Boverseas%2Bmigration%2Bto%2Bfall.jpg">
Trend is up 
Successive IGRs have seen assumptions around net overseas migration increase.
In the 2002 report, the long-term net overseas migration assumption was just 90,000 persons per, by the 2007 report the assumption was 110,000, and by the 2010 report, the assumption was up to 180,000.
For the central scenario presented in the 2015 Intergenerational Report net overseas migration has been assumed to be 215,000 per annum from FY2019.
This takes the population projections for 2050 to be some 1.9 million higher than the 35 million figure which prompted the original "<a href="https://petewargent.blogspot.com.au/2015/03/the-debate-is-over-big-australia-won" target="_blank">Big Australia</a>" debate.
And this figure for net overseas migration is expected to stay at a constant 215,000 for the full 40 years considered by the IGR, which is unrealistically low.
There is also a case to be made for the forecast fertility rates being stunted too with birth rates declining as parenthood was potentially postponed by some during the financial crisis, but let's assume here that these projections prove to be accurate.
Well below forecasts
It is my contention that the Treasury and government know full well that its net overseas migration estimates are far too low.
After all the Department of Immigration's <a href="https://www.immi.gov.au/media/publications/statistics/immigration-update/nom-sep-2014.pdf" target="_blank">own forecasts as at Q3 2014</a> showed net overseas migration accelerating to 256,900 by as soon as 2018!
So much for a constant figure of 215,000 then!
On that basis it appears extremely unlikely that net overseas migration will be capped at 215,000 in perpetuity from FY2019 onwards.
This is particularly so in light of the remainder of the IGR, which effectively tells us that:
<ul>
<li>lower immigration would lead to slower economic growth</li>
<li>lower immigration would lead to an ageing population</li>
<li>lower immigration would lead to lower participation rates and adverse consequences on the tax take</li>
</ul>
With these viewpoints so deeply entrenched in the IGR, it seems highly illogical for net overseas migration to be capped or steadily reduced over time in%age terms as assumed in the report.
 Softly softly...
Why then wouldn't the Treasury document include more realistic forecasts in the IGR?
Presumably because no government would be keen to release a report showing an explosion in the Australian population lest this be unpopular.
It is rather a classic case of politicians saying one thing while doing another.
Towards 143 million
You'll note that I didn't make any projections or estimates of my own. For one thing, forecasting population is a fool's errand given the number of parameters involved and unknown variables.
However, models and simulations can be built be demographers - for example, see <a href="https://theconversation.com/population-growth-could-go-far-beyond-igr-projections-38490" target="_blank">this article here</a> at The Conversation which discusses many of these same points in a more intelligent fashion.
Of course, Australia can't continue to import immigrants forever and continue to reap the same benefits, for the younger immigrants won't stay young forever.
The demographic <a href="https://www.demographic-research.org/volumes/vol26/14/26-14.pdf" target="_blank">research</a> suggests that after 43 years the benefits of immigration would begin to diminish and the employment-to-population ratio would fall into decline.
But 43 years is a long time in the future.
Forecasts could be wildly low
The research also shows that if net immigration and fertility were to continue indefinitely at the IGR's assumed annual levels of 215,000 and 1.9 births per woman respectively - and the current life expectancy were to prevail - then over the very long run Australia’s population would grow over the very long run to an enormous 143 million.
While looking so far into the future is pure conjecture, it seems overwhelmingly likely that the forecast population of just under 40 million by 2055 is much too low.
Immigration will continue rising simply because the economic benefits will prove irresistible to successive governments of the future, just as has been the case over the past 15 years.
It is of course incredibly difficult to model given the variables in fertility rates, life expectancies, age of immigrants and so on, if the rate over net overseas migration in Australia remains close to 1% per annum (instead of declining back to 0.5% per annum as per the IGR). then the 40 year population projections will miss wildly on the low side.
PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.
His book '<a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>' is out now.
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Big Australia to give way to Huge Australia: Pete Wargent

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GUEST OBSERVATION
We welcome the focus that the Intergenerational Report has placed on meeting Australia’s future economic, social and housing needs.
The Intergenerational Report is an essential exercise in looking ahead over the coming decades, highlighting the challenges we are facing as a nation to our economy and to our standard of living.
Top of this list must be housing Australia’s growing and ageing population, which is forecast to reach almost 40 million by 2050.
Housing is the bedrock on which all other facets of society are built. Without shelter, families and individuals cannot participate in the economy to their full potential.
Fortunately, residential construction is not only the challenge, but also the answer.
Challenges highlighted by the IGR are:
<ol>
<li>Housing our growing population;</li>
<li>Providing appropriate housing for an ageing population;</li>
<li>Ensuring housing is affordable for all Australians;</li>
<li>Job creation and workforce capacity to retain our standard of living for future generations.</li>
</ol>
New housing construction generates a range of economic benefits, which flow from the IGR, including:
<ul>
<li>New job creation;</li>
<li>Greater economic activity;</li>
<li>Appropriate shelter for all;</li>
<li>Productivity growth through housing policy reform;</li>
<li>Flow on activity to other sectors, including manufacturing and retail;</li>
<li>Broader government revenue base.</li>
</ul>
To achieve a significant increase in the delivery of housing that is affordable and meets the nation’s future demographic needs, governments must focus on investment in economic and social infrastructure, increasing the supply of residential land, and removing impediments in the planning system.
Graham Wolfe is the <a href="https://hia.com.au/" target="_blank">HIA</a>'s chief executive of industry policy and media.
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