Regions in decline
In his latest Missive, Michael Matusik posed the question of whether we are now witnessing the beginning of the decline of regional Australia. This been one of the key themes of my blog over the last couple of years.
As I have highlighted on many occasions previously here, since the mining boom passed its inevitable peak, most of regional Australia in aggregate is not creating jobs – and certainly not the full-time positions which ultimately encourage regional migration. Population growth must therefore eventually stall as a result.
And the latest figures which run to FY2014 have begun to point to exactly this playing out, with population growth becoming increasingly focused upon Sydney and Melbourne.
The Australian Bureau of Statistics released its latest Regional Population Growth figures yesterday for 2013/14 which showed that largely due to employment growth, Greater Sydney (+1.8 per cent) and Greater Melbourne (+2.2 per cent) have been attracting the strongest immigration and therefore the great bulk of population growth.
Population growth in Greater Perth (+2.5 per cent) was also still tracking strongly as at the FY2014 period end, though it has notably since been slowing.
Greater Brisbane (+1.7 per cent) showed continued solid population growth, and when combined with the Gold Coast and Sunshine Coasts, accounted for three-quarters of population growth in the Sunshine State.
Although the trend for population growth in Queensland has been slowing, the latest and more timely net interstate migration figures showed that Queensland is just tentatively beginning to once again benefit from inflows from the most populous states, and therefore the steady decline in population growth seems likely to be arrested.
Population growth in Adelaide has remained weak (+1.0 per cent).
On the other hand, as the above chart shows, in percentage terms, population growth has been relatively weak in regional New South Wales, Victoria, South Australia, Tasmania, the Northern Territory and the ACT, although there were a handful of brighter spots as we shall see below.
Only the secondary tier cities of Queensland showed any signs of real fortitude in terms of regional population growth.
The strongest absolute population growth was seen in Sydney (+84,200), Melbourne (+95,700), Brisbane (+38,500) and Perth (+48,400).
By comparison population growth was weak in regional New South Wales (+24,905) and Victoria (+11,005), and Queensland aside (+32,019), was all but non-existent elsewhere.
It has been said that NSW might just as well stand for “Newcastle Sydney Wollongong” and in terms of the population growth of the premier state, that is pretty much the case.
There was indeed some sprightly population growth to be found in FY2014 in the Hunter Valley (+3,682), Newcastle & Lake Macquarie (+3,511), Central Coast (+2,944), Maitland (+1,744) and Wollongong (+1,018), but you could almost throw a blanket around the rest.
In a plethora of regional towns such as Cowra, Grafton, Mudgee and Armidale, there is just nothing happening.
In Victoria, the smattering of regional population growth was largely to be found in Geelong (+4,084) and to a lesser extent Bendigo (+2,046) and Ballarat (+2,126), but was very subdued in most regional areas including Mildura and Shepparton, and has turned negative in Morwell.
The only state which is now consistently recording notable regional population growth is Queensland, a trend which is projected to continue.
Logan-Beaudesert – whether one prefers to classify it as part of Greater Brisbane or not – recorded a punchy +1.7 per cent population growth (+5,183).
Gold Coast (+9,143), Sunshine Coast (+5,722), Townsville (+2,969), Cairns (+2,566), Gladstone (+2,261), Rockhampton (+1,898), Toowoomba (+1,803) and Mackay (+2,036) were the other main regional contributors.
However, there is likely to be pain ahead for those property investors who were sucked into the “mining boom will go for generations” shtick, including perhaps in Chinchilla, Roma, Dalby and Emerald.
The future of Bowen seemingly hangs in the balance, dependent upon FIDs, but the latest coal price moves look… well, pretty black. After the disastrous dwelling price results seen in so-termed “property hotspot” towns such as Moranbah and Emerald, I’d pass.
Capital cities roar ahead
Overall, the data points towards an ever-increasing dependence upon capital cities for employment and population growth, with all but 20 per cent of the growth seen in the capitals in FY2014 (+289,000).
Over the decade to 2014, the strongest population growth was seen in Sydney (+656,000), Melbourne (+798,000), Brisbane (+451,000) and Perth (+501,000), with Sydney now appearing set to take up the mantle from Melbourne as the leading city for population growth through FY2015 and beyond.
Australia could – nay, should – be investing in its regional centres in order to encourage employment, infrastructure and population growth.
But outside Queensland, it’s not happening. Instead, population growth has become increasingly focused upon our two most populous cities and we look set for more of the same.
Next up, I’ll drill in to a more granular level in order to show what this really means for property markets at the suburb level.
This post originally appeared at Pete Wargent’s blog. Pete Wargent is a buyers agent and the co-founder of AllenWargent Property Buyers (London, Sydney, Brisbane). Pete is a market commentator with a range of top finance qualifications. He is a three-time finance author, including Get a Financial Grip which was rated Top 10 Finance Books of 2012 by Money Magazine and Dymocks. You can find Pete on Twitter.
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