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Tuesday 13 June 2017

Immigration picking up the pace

Strong migration numbers

Government figures have long predicted an increase in immigration, and it does now seem as though permanent and long term arrivals are gathering pace in 2017.

The net annual number of permanent and long term arrivals jumped to a 19-month high of +287,100 in April 2017, suggesting that annual population growth may be rising again towards +400,000 per annum. 

If this is the case, then this has potentially strong implications for the apartment overhang and whether it can be absorbed. 

Indeed, the arrivals numbers were strong right across the board, with the seasonally adjusted number of short term arrivals absolutely powering to a record high of 746,700 in April, smashing the previous record of 716,000 set in February.

Aussies still recorded just shy of 10 million overseas trips over the year to April, but statistics suggest that we are now on average more inclined to holiday closer to home in less costly destinations. 

With a booming New Year period this time around January 2017 was officially Australia's busiest ever month for total arrivals, with more than 2 million heads passing through customs. 

Short term arrivals boost

The short term arrivals figures have mostly been driven by tourism, but the rate of education arrivals has also surged once again to an annual pace of above 15 per cent. 

Record tourism numbers have also been recorded thus far in 2017, yet again driven by unprecedented numbers of visitors from China and Hong Kong. 

The Chinese visitors numbers are incredibly strong, but there has also been currency-driven double digit growth in those visiting from the US and Canada, as well as from Japan, India, and other parts of America and Asia. 

Different settlers

The recent uptick in annual permanent settlers has been driven largely by strong immigration from India (22,830) and China (17,910), more than offsetting a sweeping and ongoing decline in the number of Kiwis (8,890) and Brits (6,360).

The swelling in the orange segment of the chart partly represents an increased humanitarian intake, particularly from countries such as Iraq (10,060) and elsewhere in the Middle East.

Indeed, settlers from North Africa and the Middle East are tracking at levels never seen before in Australia, which you may have noticed for yourself in some of the capital cities. 

The wrap

In absolute terms this was a unambiguously strong set of numbers for both short term and long term arrivals into Australia. 

Notably this may play a role in helping to absorb the record number of apartment completions which are taking place right now.

A cautionary note here is that the recent surge in the total resident population appears to be accounted for mostly by international students and humanitarian visas, so the impact on housing demand may not be as significant as implied by the headline numbers.

Australia's population clock will tick past 24.5 million before the end of next week.