Population projections: We’re getting older and having fewer babies
ABS projections for the next 50 years point to migration as the pathway to population growth
3 min
Australia’s ageing population is clearly evident in the latest round of population projections just released by the Australian Bureau of Statistics (ABS). The median age in Australia is currently 38.5 years. By 2071, this will increase to between 43.8 years and 47.6 years.
The ABS comments: “Of the changes projected to occur in Australia’s population, ageing is generally considered to be the most dramatic, with significant changes to the age structure of the population. Ageing of the population is a trend which has been evident over recent decades as a result of fertility remaining below replacement level and declining mortality rates.”
The proportion of children aged 0-14 years is projected to decline from 18% in 2022 to between 13% and 16% in 2071. The working age population aged 15-64 years is projected to decrease from 65% to between 59% and 60% in 2071. People aged 65 years and over will increase from 17% in 2022 to between 25% and 27% in 2071.
Overall, our population will swell from 26 million as of 30 June 2022 (and 26.5 million today) to between 34.3 million and 45.9 million by 2071. We’ll see a stronger growth rate of between 1.2% and 1.7% per annum over the next decade, but over the entire projection period, the growth rate will average out to between 0.6% and 1.1% per year.
Australia’s population growth is comprised of natural increase (births minus deaths) and net overseas migration (migrant arrivals minus migrant departures). Migration will play a bigger role in our population growth than natural increase, according to the projections.
In 2021-22, there was a natural increase of 117,400 people in Australia. In 2071, the ABS projects natural increase to range from 104,500 people per year to 118,000 per year. If Australia had no migration at all over the projection period, the population would fall to 23.9 million by 2071. The ABS says Australia’s birth rate has been declining for many decades.The fertility rate peaked in 1961 during the ‘baby boom’ at 3.5 babies per woman. The replacement level is considered to be 2.1 babies, but we haven’t been there since 1975. The current average is 1.64 babies per woman.
Australian women are also having their babies later in life. The ABS comments: “Over the past 10 years, age-specific fertility rates have been declining for the younger age groups (women below age 30), whilst remaining stable among women aged 30 years and over, representing a continuing shift in fertility towards older ages.”
The ABS expects net overseas migration gains of between 9.2 million and 14.1 million people in total over the next 50 years. NSW and Victoria will continue to attract the lion’s share of Australia’s new arrivals. NSW will attract 35.8% and Victoria will bring in 32.8%. NSW will receive between 63,000 and 97,900 migrants (net) per year from 2032, whileVictoria will receive between 57,400 and 90,200.
In terms of net interstate migration, or the movement of Australian residents between states, Queensland is expected to remain the favourite destination. The Sunshine State overtook Victoria in 2016-17 and this trend remains. It was turbocharged during COVID-19 when remote working prompted many people to leave NSW and Victoria. Queensland’s NIM rate more than doubled from 22,600 people in 2018-19 to 48,800 people in 2021-22.
Australians are expected to continue loving big city living. The unique concentration of our population is a factor keeping metro property prices as high as they are today. As of 30 June 2022, 67% of us were choosing to live in one of eight capital cities. This trend will continue, however, Melbourne is projected to overtake Sydney as Australia’s largest city sometime between 2032 and 2046. Its population will grow from just over 5 million in 2022 to between 6.5 million and 9.9 million by 2071.
The states with the highest concentration of capital city residents are currently Perth, Adelaide and Melbourne, and this trend will continue. Perth is currently home to 80% of West Australian residents and this will either remain the case or rise slightly to 81% over the next decade. Adelaide is home to 78% of South Australia’s population and this will rise to between 79% and 80%. Currently, 76% of Victorians choose to live in Melbourne and this will either stay the same or lift to 77% by 2032.
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New research suggests spending 40 percent of household income on loan repayments is the new normal
3 min
Requiring more than 30 percent of household income to service a home loan has long been considered the benchmark for ‘housing stress’. Yet research shows it is becoming the new normal. The 2024 ANZ CoreLogic Housing Affordability Report reveals home loans on only 17 percent of homes are ‘serviceable’ if serviceability is limited to 30 percent of the median national household income.
Based on 40 percent of household income, just 37 percent of properties would be serviceable on a mortgage covering 80 percent of the purchase price. ANZ CoreLogic suggest 40 may be the new 30 when it comes to home loan serviceability. “Looking ahead, there is little prospect for the mortgage serviceability indicator to move back into the 30 percent range any time soon,” says the report.
“This is because the cash rate is not expected to be cut until late 2024, and home values have continued to rise, even amid relatively high interest rate settings.” ANZ CoreLogic estimate that home loan rates would have to fall to about 4.7 percent to bring serviceability under 40 percent.
CoreLogic has broken down the actual household income required to service a home loan on a 6.27 percent interest rate for an 80 percent loan based on current median house and unit values in each capital city. As expected, affordability is worst in the most expensive property market, Sydney.
Sydney
Sydney’s median house price is $1,414,229 and the median unit price is $839,344.
Based on 40 percent serviceability, households need a total income of $211,456 to afford a home loan for a house and $125,499 for a unit. The city’s actual median household income is $120,554.
Melbourne
Melbourne’s median house price is $935,049 and the median apartment price is $612,906.
Based on 40 percent serviceability, households need a total income of $139,809 to afford a home loan for a house and $91,642 for a unit. The city’s actual median household income is $110,324.
Brisbane
Brisbane’s median house price is $909,988 and the median unit price is $587,793.
Based on 40 percent serviceability, households need a total income of $136,062 to afford a home loan for a house and $87,887 for a unit. The city’s actual median household income is $107,243.
Adelaide
Adelaide’s median house price is $785,971 and the median apartment price is $504,799.
Based on 40 percent serviceability, households need a total income of $117,519 to afford a home loan for a house and $75,478 for a unit. The city’s actual median household income is $89,806.
Perth
Perth’s median house price is $735,276 and the median unit price is $495,360.
Based on 40 percent serviceability, households need a total income of $109,939 to afford a home loan for a house and $74,066 for a unit. The city’s actual median household income is $108,057.
Hobart
Hobart’s median house price is $692,951 and the median apartment price is $522,258.
Based on 40 percent serviceability, households need a total income of $103,610 to afford a home loan for a house and $78,088 for a unit. The city’s actual median household income is $89,515.
Darwin
Darwin’s median house price is $573,498 and the median unit price is $367,716.
Based on 40 percent serviceability, households need a total income of $85,750 to afford a home loan for a house and $54,981 for a unit. The city’s actual median household income is $126,193.
Canberra
Canberra’s median house price is $964,136 and the median apartment price is $585,057.
Based on 40 percent serviceability, households need a total income of $144,158 to afford a home loan for a house and $87,478 for a unit. The city’s actual median household income is $137,760.
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