STRATA – NSW
There are one thousand more of us every day – 1,037 to be exact. That’s the latest from the Australian Bureau of Statistics (ABS), recording the increase in our population between the 2011 and 2016 surveys.
A large part of this is migration and New South Wales is a high-volume target – both interstate and internationally. This is great for economic growth, but at a time when housing supply is tight, it creates some interesting conversations about the relationship between real estate and population. Today we ask the question – how does high migration affect NSW strata?
The rise and rise of the NSW population
CoreLogic RP Data have broken down the ABS figures and highlighted the growth by state and territory. Victoria is still out front with 2.4 per cent annualised population growth, followed by the ACT (1.8 per cent) and then NSW on 1.6 per cent.
But by volume, NSW and Victoria are streets ahead of the rest of the country, with 123,296 and 149,374 people migrating to each respective state. The next highest level of migration was in Queensland, at 75,372. Beyond this you drop to 18,398 – the total annual migration figure for Western Australia.
This means that more than 70 per cent of all Australian migration in a given year is coming to NSW and Victoria. It’s an incredibly high concentration of people, that must be matched by the appropriate property supply – which is where strata comes in.
Balancing migration and real estate
It should be no surprise that NSW and Victoria are the primary recipients of migration. As economic powerhouses, they are home to the largest number of jobs and the greatest level of investment of our capital cities. However, this has to be met at an infrastructural level.
Planning protocols (i.e. minimising red tape), increasing transport quality and adding to housing supply will be necessary to meet the rise in real estate demand that comes with large-scale migration. Strata can play an important role here. Rises in migration reflect the unstoppable trend of urban densification, where more people live in fewer areas – the number of people living in Australia’s metropolitan areas is only going up.
Strata developments capitalise on space by providing lots of housing supply without taking up as much land, and should form the backbone of any city looking to embrace high migration. This requires support from government, housing industries and the finance sector in unison.
However, there is a lot of nuance in addressing migration with housing – just look at the type of migration into NSW.
Breaking down migration group by group
Despite the high volume of people entering NSW, CoreLogic’s analysis makes an interesting point – interstate migration is the lowest it has been in NSW since 2013, with a net loss occurring in the year to March. At the same time, net overseas migration is near all-time highs.
If this continues, it isn’t enough to just build fantastic strata developments and leave it at that. Legislation and lending protocols have to acknowledge and work with the type of demand flowing into the state, which appears to be foreign owner-occupiers.
It’s a tricky balancing act – catering to migration flows can leave first home buyers feeling out of the loop, while all the time the overall supply of housing has to keep growing to match demand. There’s no easy solution, but one thing is for sure – strata is crucial for ensuring denser cities can still maintain a high quality of living.