State of the Nation
It was great to attend the Housing Industry Association (HIA) State of the Nation conference in Brisbane today.
Senator Matt Canavan discussed policies to promote decentralisation and Zipf's law, and how Australia has been somewhat exceptional in its largest cities attracting such a high share of the population.
Queensland is actually the one state where the bulk of the population lives in regional cities and not the capital (albeit the south-east corner of the state from Noosa to the Tweed is becoming increasingly crowded).
Of course, Matt (and indeed everyone else) couldn't help but notice that the event was held directly across from one of Brisbane's many parks now hosting tent cities.
The HIA's Chief Economist Tim Reardon also discussed population pressures, and how supply shortages are likely to persist throughout this decade.
Housing supply is expected to pick up in 2025, with most cities through the worst...except Sydney, according to the HIA's latest chart packs data.
Queensland supply is expected to pick up, with an Olympics village due to be constructed at some stage (though who knows when?).
Overall, the HIA's housing supply forecasts have not materially changed since two years ago, with around 983,500 new dwellings expected to be delivered over the next five years, which is well below the government's stated target of 1.2 million.
This is quite an optimistic forecast - the lobby group the Urban Development Institute of Australia (UDIA) has reportedly projected that the housing supply will short by some 393,000 dwellings by 2029.
Tim noted that although government have variously pledged to curb immigration, in practice by Federal and State government forecasts nearly always underestimate the reality, and not by a small amount.
In reality, population growth is likely to remain high for the remainder of the decade to fill job vacancies and tackle skills shortages, he noted.
Population pressures to continue
It was timely that the ABS released the latest permanent and long-term arrivals figures for the month of January 2025.
Over the year to January, permanent and long-term arrivals were exceptionally high, but we are now seeing more people head overseas too, after some years of professionals feeling somewhat trapped Down Under.
On a net basis, net permanent and long-term arrivals slowed to +432,000 over the year to January, about -13 per cent off the all-time highs of last year.
If you think that population pressures are about to subside as the year goes on, though, think again.
International student arrivals are apparently set to roar to a monthly all-time high of 201,490 according to the February data, taking the stock of international students in Australia to 700,000 and beyond, with monster volumes of enrolments to continue through 2025 and 2026.
The February figures were 15 per cent higher than the February 2019 record figure for international student arrivals, and the government does not appear to have a plausible plan in place for how to slow the frenzy.
Evidently there will be some ongoing challenges here for whichever side of politics wins the election come May.
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