Record migrant intake to keep rents high for years to come

The biggest one-year jump in Australia’s population, fuelled by a record 518,100 new migrants calling the country home, has prompted warnings that the nation’s rental market will remain under pressure for years amid signs inflation is driving more people to regional areas.

The population swelled by 624,100 through 2022-23, more than 1700 people a day, with 80 per cent of the extra residents absorbed across Victoria, NSW, Canberra and Queensland.

Australia’s population has been supercharged by record numbers of migrants.Credit: Brook Mitchell

According to the Australian Bureau of Statistics, Victoria’s population grew by more than 181,000 to 6.8 million while NSW added 172,600, taking its total number of residents beyond 8.3 million.

Most migrants moved to four states: NSW took in 174,200, Victoria added 154,250, Queensland gained almost 84,000 while the fastest growing part of the Commonwealth, Western Australia, accepted 61,600.

The bureau noted temporary visa holders such as international students were the main contributor to the high net migration level, with the number of people leaving the country not yet back to pre-pandemic levels.

Migration accounted for 83 per cent of total population growth through the year as natural increase – births minus deaths – continued to fall.

The short-lived COVID-19 baby boom has come to an abrupt end. There were 295,900 births in 2022-23, a 4.1 per cent fall on the previous 12-month period.

In the June quarter alone, births were down almost 7 per cent on the same quarter in 2019.

Deaths, pushed higher in part by COVID-19, continue to climb. They were up 3.6 per cent to a record 189,900 in 2022-23 and are 10 per cent up on their pre-COVID-19 level.

The Albanese government is overhauling its migration strategy to address key skills shortages across the economy, refine the intake of international students by lifting standards and ending rorting, and slash the number of temporary workers in the country to ease population and housing pressures.

Treasurer Jim Chalmers says despite the lift in migration, the population is 177,00 lower than had been expected by the previous government.Credit: Alex Ellinghausen

Treasurer Jim Chalmers said while migration had climbed, total immigration over recent years was still 177,000 short of the level that had been expected when the Morrison government was in power.

He said the government’s new migration strategy recognised the pressure local communities currently faced.

“[It] is recognition that we need migration to be sustainable, we needed it to be in our national economic interest,” he said.

This week’s mid-year budget update, which forecast net migration to edge down to 375,000 this financial year, contained warnings from federal Treasury that rental inflation was likely to remain elevated for the foreseeable future because of pressure on the property sector.

The director of economics and research with community housing organisation PowerHousing Australia, Matt King, said the figures confirmed the ongoing pressure on rents and property prices.

He said last financial year, about 175,000 new dwellings were completed when 200,000 were needed to absorb the current level of net migration.

“There is no normalisation of rental markets in sight for cities and regions across Australia. This will only put pressure on an overheating rental market,” he said.

Former top immigration official Abul Rizvi said the figures showed the government had a difficult task ahead in slashing net overseas migration to 250,000 in the year to 2025.

“The implication is a lot of people are arriving on short-term visas and extending their stay, and that fundamentally is a bad reflection on the visa system,” Rizvi said. “It means you’ve got your original decisions wrong.”

The government was off to a “bad start” in figures and was “going to have to go much harder” to fulfil its policy, he added.

The figures also showed the shift of people out of capital cities to regional areas, which surged during COVID-19, was continuing. Regional Queensland took in 4800 people from other regions and cities during the quarter.

CommSec chief equities economist Craig James said cost-of-living pressures might be behind the ongoing move to the bush.

“What is striking is the population flows to country areas, especially Queensland, followed by NSW and Victoria,” he said.

“The question is what role the cost of living is providing. If you are a builder, other tradesperson or police officer, teacher, your skills can be easily transported to regional areas and presumably with lower housing costs.”

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