Regional Australia will remain exactly that, provincial at best

I have posted several missives in recent months about regional population growth.

This communique claimed that the move from the capital cities to regional locales due to Covid-19 is a short-term occurrence and is even overstated when you have a closer look.

It seems that others share that view too, with some calling the current trend a “sugar hit to the regions”. 

A colleague has also suggested that the real reason why the regions have seen an increase in net internal migration over the last 12 months is because people who would normally have moved from the regions to the capital cities are (for now) staying put.

Interesting. And the ABS statistics suggest that this is true.

Net internal migration to the regions (as defined by the ABS as those areas outside of their definitions of the capital cities) was 36,500 last year, which was up 14,000 or 62% on the year before.

Yet net migration is worked out by comparing those that move into an area against those that leave the same place during the same time frame.

Charts 1 and 2 below outline what is really happening across regional Australia.

Chart 1 shows that a few things.

Firstly, that the overall level of arrivals to, and departures from, regional Australia has fallen over the last 12 months.

This is because there are no overseas migrants (at present) arriving in Australia.

This impacts both the capital cities and regional Australia.

Secondly, it shows that there has been little change in the number of people from the capital cities to the regions, whilst there has been a big increase in the number of regional residents who haven’t moved to the bigger smokes.

Chart 2 shows that this trend increased during 2020 and as certain Australian States implemented increasingly draconian covid-related lockdowns and other restrictions.

End note

Some 70% of Australians live in the six main cities.

I think that is will not change because of the pandemic.

In short, the capital cities are where the jobs and the services that people want are located.

Many regional residents have put their move to the capital cities on hold last year, and as a result, I believe we will see a big snapback to positive net migration to the capitals (and their surrounding conurbations) once the covid vaccines roll out and travel-related restrictions cease.

Unless major monies are spent on regional infrastructure and this quantum rivals the amounts being spent in the capitals, any population movement to regional Australia will be modest at best.

Despite recent weasel words suggesting otherwise, the decision-makers must think this too.

Ask yourself, if we were truly going to see a regional resurgence, then why are almost all the existing, and proposed, infrastructure projects focused on the major capitals and mainly in the inner city areas within those cities.

Regional Australia will remain exactly that, provincial at best.

About Michael Matusik Michael is director of independent property advisory Matusik Property Insights. He is independent, perceptive and to the point; has helped over 550 new residential developments come to fruition and writes his insightful Matusik Missive