Forget the population surge, there are 23.9 billion reasons to love a 'Big Australia'

By | octubre 2, 2017
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Look out, here comes another wave of anti-immigration sentiment, or at least pro-much-lower-immigration sentiment, riding on a surge in March quarter population figures, the biggest rise since 2009. 

The population growing in the March quarter by 126,000 is either being blamed or thanked for keeping housing prices strong in Sydney and Melbourne. It will feed the tide of anti-immigration sentiment that’s spreading out beyond Dick Smith publicity stunts and One Nation ratbaggery, assisted by the «Australia First» rhetoric of the Labor and Liberal parties.

A population milestone

Our migration success story has provided rich rewards for our economy and reinvigorated our culture. Michael Pascoe comments.

But before reinstating Bob Carr’s «We’re full!» signs, it’s worth examining who is behind that surge and the role they’re playing – and paying – in our economy. The growth is predominantly from job and wealth creators rather than job thieves, customers rather than shoplifters, future ambassadors for Australia if we get it right rather than infrastructure leeches.

The sharp growth in net overseas migration (NOM) is mainly foreign students, one of our biggest sources of export income.

Back in 2015 when there were 413,000 foreign students in Australia, the Australian Bureau of Statistics reckoned they contributed $17.5 billion to the economy. At the end of July, there were 564,869 foreign students, who would be contributing considerably more. If the contribution increased proportionately, it would be worth $23.9 billion this year.

Foreign student numbers are up 15 per cent on July last year. Working backwards from that, there are about 74,000 more students – call it the NOSM, net overseas student migration – this year.

Our total net overseas migration (arrivals minus departures) in  the March year was 231,900 – up 49,100 on the previous corresponding period.

I’m cheating a little bit with the numbers here, comparing March and July years, but take away the NOSM from the NOM and the non-student growth was about 158,000.

The 457 visa numbers were contracting before the government announced its shake-up and the Kiwis have been going home from Western Australia. Our permanent migrant visa quota has been steady at 190,000 for several years. The non-student NOM indicates enough people leave the country each year as to make our net permanent intake look considerably less threatening than the latest bald figure.

And there’s actually no surprise about this student surge for those who are interested in such things and their impact on housing. Back in 2015, the Reserve Bank’s submission to a parliamentary housing inquiry correctly fingered rising student numbers as a housing gamechanger

The nature of student digs means particular pressures in particular areas. Sydney, Melbourne and south-east Queensland get most of the numbers in that order. As the RBA opined two years ago: «While any net immigration will boost demand for housing, the nature of that demand will depend on the life stage and circumstances of the newly arrived residents. The high fraction of students and former students in the flow of new migrants to Australia implies that the households they form will be younger than average, have lower incomes (at least initially) and be less able to purchase property (without familial assistance) than the average household already resident in Australia. 

«This might result in lower home ownership rates than if migration had been lower or less concentrated in student visa entry. Student migrants will also be more likely to demand housing that is close to universities, city centres and other amenities rather than detached houses on the fringe of cities.»

The growth is predominantly from job and wealth creators rather than job thieves, customers rather than shoplifters.

So that surge in building investor units isn’t showing up in sharply higher vacancies and falling rents. (OK, it has in Brisbane, but the pickup in interstate migration – New South Welsh folk seeking a team that can make a rugby league grand final – is promising to ameliorate that as well.)

The rise in NOSM puts strains on local infrastructure, but they’re strains worth dealing with and overcoming. Investment in infrastructure is just that – investment, not a waste of money. 

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