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The release of new data by the ABS about an increase in Australia’s population highlights the need for further supply to be built, according to economists.
Australia saw its population increase by 1.6 per cent over 2018 up to 25.2 million people, according to ABS figures.
Victoria saw the largest growth of all the states and territories during 2018 at 2.2 per cent, followed by both Queensland and the ACT at 1.8 per cent, NSW at 1.6 per cent, Tasmania at 1.2 per cent, Western Australia at 0.9 of a percentage point and South Australia at 0.8 of a percentage point. The Northern Territory was the only state or territory to record a population decline, at 0.4 of a percentage point.
Net overseas migration was the strongest factor for the overall growth, making 61.4 per cent of 2018’s population growth.
Due to this, Tim Reardon, chief economist at the Housing Industry Association, cautioned against making dramatic migration changes to Australia’s stable migration intake.
“Changes to migration policies that slow population growth risk adversely impacting Australia’s potential for economic growth,” Mr Reardon said.
“It is prudent for governments to maintain a stable, well-rounded migration intake as part of an overall population policy. This must [include] a strong level of skilled migration as part of the intake.
“Stable growth in population is a welcome development, given the risk that further declines would pose for the residential building industry at this particular point in the cycle.”
Shane Garrett, chief economist at Master Builders Australia, said the ABS data backs up the need for state and territory and federal governments to work together to create microeconomic reforms to fast-track attempts to bust congestion and making tax more efficient.
“Australia’s building sector is currently facing challenges in the form of weakening economic growth and difficulties around access to finance in some parts of the market. Fast-tracking the rollout of previously announced government infrastructure projects would help strengthen confidence on the ground in addition to meeting the needs of a growing population,” Mr Garrett said.
“Master Builders estimates that between 193,850 and 201,705 new homes will need to be built each year over the coming two decades to accommodate future growth. Failing to do this will surely result in home ownership becoming an even more formidable quest for our younger generations.
“Given that we managed to build just 173,350 dwellings per year over the past 20 years, the onus is on all tiers of government to lift their game and ensure that land supply, planning policy and taxation settings are more conducive to the delivery of the homes and buildings we will require.”