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Population growth outstrips housing supply

Australia’s population growth is outstripping housing supply, with net overseas migration driving the rise in residents.

According to the latest Australian Bureau of Statistics (ABS) data, the nation’s population grew 2.5 per cent in 2023 to 26.97 million people.

ABS Head of Demography, Beidar Cho, said net overseas migration totalled 547,300 people last year, with 751,500 arrivals and 204,200 departures.

“Net overseas migration drove 84 per cent of this population growth, while natural increase accounted for the other 16 per cent,” she said.

Natural increase comprised 103,900 people in 2023, which was 6.4 per cent less than in 2022 and was made up of 287,100 births and 183,100 deaths.

Western Australia had the fastest growing population, up 3.3 per cent, or 93,800 people, from 2022, followed by Victoria, which grew 2.8 per cent and Queensland, which grew 2.6 per cent.

Tasmania had the lowest growth at just 0.4 per cent, but no state or territory recorded a fall in population.

NSW is still our most populous state, with 8,434,800, followed by Victoria with 6,906,000 residents,

The Northern Territory is our smallest state with 253,600.

Despite Australia’s popultion growing by 651,200 people in 2023, the Housing Industry Association says it still leaves the estimated resident population around 25,000 people below its pre-pandemic trajectory. 

This is based on the rate of growth from the decade to 2020.

HIA Chief Economist, Tim Reardon, said the building industry had consistently argued for stable and reliable population growth. 

“The boom/bust cycles in migration seen over the pandemic period leads to undesirable economic, social and business outcomes,” he said.

“As the main determinant of population growth, the fluctuating nature of NOM has a crucial impact on workforce participation numbers, national skills capacity, productivity and overall economic output.

“HIA supports a managed migration program that delivers adequate skilled migrants in construction and building professions and trades to meet Australia’s ongoing housing needs.

“HIA estimates that Australia’s future underlying housing demand sits above 200,000 homes per year. Unfortunately, only 172,725 dwellings were completed in the calendar year 2023, This will add to rental and house price pressures.”

Mr Reardon said the stark demand/supply imbalance in new home building required significant and swift policy action from all levels of government.

“Up to 50 per cent of a new house and land package is taxes, fees and charges. Reducing these costs is necessary to delivery more homes,” he said.

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Kylie Dulhunty

Kylie Dulhunty is the Editor at Elite Agent.