The truth about migration to regional Australia

I think it is worth adding some clarity to the regional population growth bumf that has been doing the rounds in recent weeks.

Chart 1 below shows two lines. Urban Sprawl

The grey line displays net annual internal population movement away from the combined eight Australian capital city statistical divisions to ‘regional’ Australia according to the most recent ABS data.

The trouble with this official release is that much of this ‘regional’ population growth – revisit the grey line in chart 1 – actually takes place in the urban edges of our capital cities.

Think Lake Macquarie, Newcastle, and Wollongong around Sydney.

Ballarat, Bendigo, and Geelong near Melbourne and the Gold Coast, Sunshine Coast, and Toowoomba neighbouring Brisbane.

My red line in chart 1 factors in these outer urban conurbations.

Regional Migration

The ABS suggest that some 36,500 people moved out of our capital cities to regional locations over the last 12 months, yet my working advocates that only 12,500 people – some 65% less – actually moved to true regional locales such Dubbo, Armidale, Mackay, or Townsville last year.

Most of the regional movement, again, has been to the outer edges of our capital cities.

Table 1 highlights this trend for Queensland.queensland internal migration

Many of these outer urban areas are within commuting distance of our capitals and they hold much of the affordable vacant land supplies too.

HomeBuilder – on top of the numerous state government first home buyer boosts orientated towards new builds – has helped drive this migration.

Chart 2 below shows that first home buyer now accounts for 40% of all home loans to new builds, compared to a 30% share of all home loans for established housing.

First Home Buyers

Given there is no capital gains tax on your principal place of residence in Oz, it makes sense (well to me anyway) that first home buyers purchase older digs -renovate, personalise and then resell in the future – rather than buy a new property, which often has little short to medium term capital upside.

But the plethora of government grants has obviously made new digs very attractive.

For now.

For mine, the government largesse targeting first home buyers has had more influence on the recent increase in ‘regional’ population growth than any covid-related lifestyle rethink.

Once HomeBuilder expires, I believe we will see a marked reduction in regional population growth.

Also, one of the challenges facing regional Australia is that much of its population gains are older people.

Young people are still attracted to our capital cities. See table 2 below.

internal migration

If regional Australia is going to advance in terms of its population and economic footprint it will need to attract young, entrepreneurial peeps.

Whilst there has been some improvement in the space – revisit table 2 – the jury, for mine, is still out.

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Michael Matusik

About

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


'The truth about migration to regional Australia' have 2 comments

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    April 5, 2021 Sathia Thavasy

    While the highlights in the article are certainly illuminating, it would further help to have a deeper level analysis: Why is it that the internal migration to regional areas beyond the outer fringes of the larger cities, slow? Among those who do migrate, what makes it attractive for the older generation and what prevents the younger generation from migrating? Needless to say, a comprehensive and systematic approach towards making regional living attractive for all age groups would be the way to go.
    One way of spearheading the growth of younger population in regional areas would be the provision of highly motivating incentives to stimulate establishing institutes of higher education with full blown supportive facilities such as student accommodation. This would be further supportive of the current immigration policies that encourage regional education and living for international students who wish to live permanently in Australia. Regional areas would be able to offer more affordable education as compared to the larger cities. It would boost the regional economy and help ease some population pressure off the capital cities. There would be spin-off benefits for regional areas from localised researches conducted at the regional learning centres. Most importantly, such ventures would provide new investment opportunities for the urban folks and the regional folks alike.

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