Migration Boom Swells Australia

Migration boom swells Australia

Jessica Irvine
Economics Correspondent
The Sydney Morning Herald
December 5, 2007

AUSTRALIA'S population is growing at its fastest rate in nearly two decades, thanks to rising fertility rates and an immigration boom bigger than that during the aftermath of both world wars.

The number of Australians grew by 1.5 per cent, or 315,700 people, over the year to June 30, topping 21 million for the first time.

Australia now ranks above the world average for population growth of 1.2 per cent, and only just behind the rapidly expanding Indian population, which is growing by 1.6 per cent and expected to overtake China by 2050 as the most populous country.

Of the two possible sources of population growth – immigration and natural increase – it is immigration that is driving the population surge.

A record net 177,600 people migrated to Australia last financial year – arrivals minus the people who left – busting a previous record of 172,900 set in the Bicentennial year of 1988.

This also exceeds the huge net influx of migrants that occurred in the aftermath of both world wars, which was 166,303 in 1919 and 149,507 in 1950.

The chief economist at CommSec, Craig James, said immigrants were being attracted by Australia's booming job market.

“With skilled workers in short supply, businesses have been …seeking staff overseas, and it's clear that migrants have responded in droves,” Mr James said.

Nowhere was this more evident than in the boom state of Western Australia, which clocked the fastest population growth of any state at 2.3 per cent.

NSW, by contrast, continues to bleed people to other states, resulting in a lacklustre growth rate of 1.1 per cent.

NSW suffered the biggest net loss of people to other states at 27,333 people last financial year.

The booming economy also appears to have given Australians a renewed confidence to have babies. After a slump in fertility to a record low of 1.72 births per woman in 2003, the fertility rate has risen steadily to 1.85, the highest in 14 years.

Once again, Western Australia led the way, recording the highest fertility rate for the mainland, excluding territories – 1.98 births per woman.

NSW's fertility rate was in line with the national average at 1.86.

The surging population has raised questions about whether enough housing is being built to accommodate new citizens.

Building approval figures released yesterday show that in the year ended October, 154,623 dwelling units were approved to be built. This is below economist's estimates of underlying demand of 175,000 a year.

In NSW just 29,621 new dwellings were approved, compared to an annual net influx of about 71,900 people.

So long as higher demand fails to be met by increased housing supply, this will add further pressure on house prices and rents.

A senior economist at Commonwealth Bank, Michael Workman, predicted rents would continue to rise, with population growth a major contributor.

“Population growth is likely to remain quite firm as the Federal Government responds to strong demand from the business sector for skilled and professional staff. The jobs markets need more people.”