Economics commentator Michael Pascoe recently wrote an insightful article on Yahoo about Australia’s population growth.
He explained how both sides of politics as well as the Reserve Bank all recognize that our population is going to have to increase significantly, yet no one really wants to talk about it.
Tucked away in Friday’s Reserve Bank statement on monetary policy is the assumption that Canberra is too afraid to make: Australia’s working age population will grow by 1.7 per cent over the next 2 years “in line with the recent pick-up in the rate of immigration”.
Ever since Kevin Rudd made the mistake of calling a population of 40-odd million “Big Australia”, politicians on both sides have run a mile from population growth figures. Government and opposition alike prefer to ignore population questions and, when cornered, tend to resort to various weasel words to give the impression that nothing much is happening and we should all just move along.
It’s even Liberal Party policy to out-source migration levels to the Productivity Commission so that politicians won’t be held responsible.
But what both sides of politics know and quietly go along with is that 40 million is not actually a “Big Australia” – it’s simply what we have to have to handle the strain of Baby Boomers retiring from the workforce and becoming very expensive to keep in their old age. Without an on-going strong skilled migration program, Gen X and Y would have to pay vastly more tax to support Boomers for whom compulsory super came along too late. And even with migration growth, our demographics say the total tax take will still have to rise.
If you’ve been following my blogs you’ll know that I see Australia’s strong future population growth as one of the major elements underpinning the long term success of our property markets. The other is the increasing wealth of our nation.
As I see it there’s no choice – our population is going to have to grow substantially. And deep down both sides of politics agree.
Of course his could (OK it will) lead to social and infrastructure problems, but it will also underpin our property markets well into the future.
Especially when you realise that most of these new migrants will want to live in one of our four major capital cities and many will want to live in the same suburbs – those where the action is. Yes the old supply and demand ratio will play it’s part pushing up the value of well located properties.
Subscribe & don’t miss a single episode of michael yardney’s podcast
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
Need help listening to michael yardney’s podcast from your phone or tablet?
We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.
Prefer to subscribe via email?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.