Australia’s population continues to grow strongly after the decline during the pandemic, with the increase in some regions outpacing others, and their home price growth also surpassing the average.
Recent population data from the Australian Bureau of Statistics revealed that annual population growth was strong, with an increase of 634,000 people in the year ending June 2023.
During the pandemic, border closures led to a significant decline in migration, causing population growth to hover near zero throughout the period.
However, since mid-2021, Australia’s population has been on the rise, reflecting a strong recovery in migration following the easing of restrictions and return to normalcy.
However, the impact of the pandemic remains evident when we examine the data over an extended period.
It shows that our population has grown by about 316,000 people per year since June 2019, based on a 5-year rolling average. This is slightly below the levels seen over the past 20 years.
While this holds true at a national level, some regions are experiencing much higher rates of growth, with numbers upwards of 30,000 over the past five years.
SA3s, geographical regions accommodating populations ranging from 30,000 to 130,000 as per Australian Bureau of Statistics standards, serve as our focal points for analysis.
Among all SA3s in the country, Wyndham on the western edge of Melbourne saw their population increase the most. Compared to June 2018, there are now 41,000 more people residing in the region.
Blacktown – North in western Sydney took the top spot in NSW and was ranked as the second-highest region in terms of population growth over the past 5 years. The region has grown by 36,000 people since June 2018.
In Queensland, the Ormeau and Oxenford region was popular among interstate and international migrants, with 28,000 additional people over the period.
Playford in Adelaide’s north and Swan in Perth’s north west saw their population expand most in their respective states, with 7,000 and 17,000 more residents compared to June 2018.
A deep dive into the location of these regions reveals a notable trend – most of the SA3s are situated on the outskirts of our capital cities or in regional areas.
A potential factor contributing to this trend is that homes in a majority of these regions are generally priced lower than their broader greater capital city area (GCCSA).
This is evident when we look at the current median sale price of homes in these SA3s. Over 60% of them sold for less than the median in their respective city or regional area.
With housing affordability at its lowest in 30 years, it may be the case that regions with affordable housing are attracting more people and experiencing stronger population growth.
However, strong population growth could also be a result of these regions being zoned for home development. They tend to be in peripheries of cities where more new homes are being built relative to other areas. The increase in the supply of homes could be contributing to more competitive pricing.
Not only do homes in these regions cost less but they have also seen strong price growth.
This is evident when we assess the five-year growth in median sale prices in these regions against their respective GCCSA.
All except four of the SA3 regions have experienced larger price growth in the past five years compared to their corresponding city or regional area.
In some regions, like Rouse Hill – McGraths Hill in Sydney, Ormeau – Oxenford in regional Queensland and Fleurieu – Kangaroo Island in regional South Australia, the difference is greater than 20 percentage points.
While the surge in population and subsequent demand for housing may be driving these strong price increases, the upward trend in prices could also signal the growing appeal of these areas.
People may be attracted to the potential of these regions which can contribute to their heightened population growth.
While the government currently has a target to build 1.2 million homes over the next five years in response to the forecasted growth in population as well as the housing shortage, the rate of construction is falling short.
With supply unable to meet continued strong housing demand, home prices may experience further upward pressure, potentially exacerbating the challenge of securing housing close to our city centres, where prices tend to be higher.
More people are likely to be pushed further out as they seek more affordable options.
