Before COVID-19, Australia had a steady flow of about 235,000 people coming in each year.
But when the pandemic hit, they closed their borders, and almost no one came or left for two years.
If the pandemic hadn't happened, we would have had about 470,000 people moving in during those two years.
In February 2022, Australia opened its borders again, and experts predicted a huge surge in people moving in, like what happened after World War II.
They expected around 400,000 new arrivals in 2022.
Official data later confirmed this, with 408,900 people coming in and helping the population grow by 2.0% that year.
Initially, experts at Westpac thought this rapid migration pace would slow down in 2023 to 350,000 and in 2024 to 275,000.
These estimates were higher than what the government thought, which was that migration would go back to the pre-pandemic rate of 235,000.
But it turns out that the population growth in 2023 is even stronger than many commentators thought it would be.
According to the government's new predictions, if things go back to normal by 2023-24, we'll see about 475,000 people moving in 2023, 375,000 in 2024, and 275,000 in 2025.
Compared to the usual rate of 235,000 before the pandemic, this means there will be an extra 240,000 people in 2023, 140,000 in 2024, and 40,000 in 2025.
So, from 2020 to 2025, we expect about 125,000 more people to move in than what we would have expected without COVID-19.
This means that by the end of this year, we'll have made up for the people who didn't come during the pandemic, and we'll even have more people moving in than before COVID-19.
This isn't the first time we've seen such big changes in migration.
After World War II, for instance, there were times when migration didn't add many people, but by 1949, it was a big part of the population growth.
The information about Australia's population, including migration, isn't very up-to-date, and it's published with a delay of six months.
The latest data, from March 2023, shows that population growth is at 2.2% per year.
According to the data in August, the number of people of working age (those who can work) is growing at a rate of 2.8% per year up to August 2023.
This rate is similar to what we saw in June 2023, which was 2.7%, but it's much higher than the 1.9% rate we had back in August 2022.
Based on Westpac's calculations, these numbers suggest that the overall population growth increased to 2.3% per year in the June quarter.
Looking at just the data from August, it's likely that this faster pace will continue through the September quarter.
This means that population growth, which sped up a lot in 2022, is now slowing down a bit as we move through 2023.
Looking ahead to 2024 and 2025, it is expected that the pace of people moving to Australia will slow down.
This is because fewer people will be arriving, and more people will be leaving the country.
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Westpac's data show that most of this slowdown will happen because fewer people will be coming to Australia.
Part of this is because the backlog of people who couldn't move due to COVID-19 is clearing up.
But it's also because Australia is changing its migration policies in response to the challenges posed by the pandemic and the reopening of its borders.
To understand this better, let's look at the group of temporary migrants in Australia, excluding tourists.
The two biggest groups are foreign students (28%) and New Zealanders (39%).
While these two groups had very different experiences during the pandemic, both are starting to return to Australia in larger numbers than before the pandemic, as of mid-2023.
Similarly, the number of people on working holiday and skilled employment visas, which make up about 18% of temporary migrants, dropped a lot during the pandemic but is now on the rise and getting closer to pre-pandemic levels.
In the later part of 2022 and into 2023, there was a big increase in other temporary migrants.
Their numbers went from an average of about 170,000 in 2019 to 426,000 by July 2023.
Most of this increase was due to the Subclass 408 Pandemic Event visa, which helped people work during the pandemic.
There was a similar trend with bridging visas, but those have come down from their high levels during the pandemic
Many people used the Pandemic Event visa as a way to stay in Australia while they waited for other visas.
So, now we have a lot of temporary migrants in Australia, and most of them are back to the same numbers as before the pandemic.
On the other hand, more people leaving Australia for other countries is a possibility.
In the year up to March 2023, about 227,000 people left, which is still less than the average of 300,000 people leaving each year before the pandemic.
Note: The population growth due to migration has been strong this year and seems like it's reaching its highest point.
This population growth has been a big factor in keeping our economy strong.
Without it, our economic situation would have been much worse.
When we consider this strong population growth and our expectations for economic growth, Westpac predicts that the income per person (GDP per capita) will go down by about 1.1% in 2023 and 0.3% in 2024.
Even though there has been a lot of demand for jobs because of the increase in population, we think that as the economy slows down, there will be fewer job opportunities.
This means that the unemployment rate will likely go up over the next year, from 3.8% at the end of 2023 to 4.7% at the end of 2024.
Source of charts and data: Westpac