Migration slows further
The May 2016 Overseas Arrivals and Departures figures showed rolling annual net permanent and long term migration down by 10.7 per cent over the past year at +267,100, its lowest level in 9 years.
Recent research has unsurprisingly linked this phenomenon with the end of the resources construction boom – which in turn may be adverse news for regional population growth, as the most populous capital cities continue to mop up an ever greater share of the growth in headcount.
The slowdown in permanent settlers from Europe has been nothing short of sensational, from several thousand per month before the financial crisis to an anemic 810 in May.
And the way the British currency is faring – slumping to a 31 year low – these numbers may be set to decline even further.
Less than a fifth of permanent migrants now hail from Europe, as the share from Asia has mushroomed out to 59 per cent.
Long and short term demographic statistics can often demonstrate a neat symbiosis, with a slowdown in the economy and thus permanent migration reflected in a weaker currency and in turn an increase in inbound short term arrivals.
And so it is, with short term arrivals booming by 9.3 per cent over the year to May to beyond 7.75 million for the first time.
Short term departures are still increasing thanks to near record Australian household wealth, but at a much more sedate pace of growth at under 4 per cent. It’s a net boost for the international trade balance.
The boom is overwhelmingly a Chinese phenomenon, with total arrivals from China, Hong Kong and Taiwan soaring to beyond 1.5 million for the first time on record – a total that has more than doubled in less than five years – notching up another thumping 21 per cent year-on-year increase.
Why are arrivals coming?
Most short term arrivals still come for holidays (3.85 million), but increasingly they come to visit friends and relatives (2 million), thereby reinforcing the now indelible links with Asia.
Short term international arrivals for the purposes of education totaled 489,800, up by +16 per cent from a year ago, despite a recent blip (perhaps not unrelated to a recent change in rules).
The new student visa rules will kick in from 1 July, which could lead to a material boost for this sector.
Overall, there are some conflicting signals in these data, with a slowing rate of long term immigration, but a greater number of short term arrivals than ever before, particularly from Asia.
On balance it seems likely that total population growth forecasts will undershoot government forecasts – at least for a while – so more understanding of internal and interstate migration will be instructive.
The latest statistics strongly suggested that Brisbane and especially Melbourne are benefiting from internal migration at the expense of Perth, Darwin, and Adelaide (and Sydney too, although population growth in the harbour city is already so high that some migration to cheaper and warmer climes is more or less baked in).
Reserve Bank research showed that unsurprisingly “student migrants will be likely to demand housing that is close to universities, city centres and other amenities rather than on the fringe of cities”.
Most will rent, at least initially, so the forecast arrivals of hundreds of thousands of student migrants raise interesting question marks about the widely predicted supply overhang of apartments.
It is also noteworthy that Sydney and Melbourne are expected to receive a disproportionate share of net student arrivals with the two most populous states set to absorb more than two-thirds of the total student immigrants (and projected contributions to total annual population growth of around half a percentage point), and Queensland accounting for much of the remainder.