The fortunes of Australia’s cities and towns are unusually connected to trends and events like a mining boom, an earthquake and Chinese investment.
The rate of population growth mirrored the rise and fall of the mining boom. The Christchurch earthquake and the subsequent construction boom in New Zealand had its effect on the rate of population growth as well. The impact of the Chinese investment will be explained later in this article.
The Australian Bureau of Statistics released estimates of population growth for the 2015 financial year in April.
The database relates to significant urban areas that might be simply described as the contiguous urban area. This means that for larger towns and capital cities outlying commuter towns are measured as separate urban centres. For example, Sydney’s population (4.5 million) in this dataset excludes the Central Coast (325,000) and other outlying settlements that are otherwise wrapped up into a metropolitan population of close to five million.
Between 2010 and 2015 Australia’s rate of population growth dropped from 377,000 to 317,000 which reduced the percentage rate of growth from 1.7% to 1.4%.
The housing demand is inevitably linked to population growth. Of a matter of fact this is an issue as the diminuition in growth rates has not been spread evenly across the country. In a normal distribution a 0.3 percentage-point drop in population growth over five years would gently reduce demand for housing across the urban hierarchy. Not so in Australia. Some towns have boomed, others have come to a stop of growth.
Australia’s largest cities, Sydney and Melbourne, can document an increasing growth rate over the last five years despite the decreasing growth rate on a national level.
The two biggest housing markets have strengthend during and beyond the mining boom because of internal migration and thanks to the China migration effect. Chinese are the largest source of inflowing migrants to Australia these days and prefer Sydney and Melbourne to other cities. That is why both cities have escaped the worst effects of the mining boom collapse.
The falling rate of growth hits six towns in particular. They are, in descending order of contraction: Karratha, down 3.5 percentage points, from 3.3% growth to 0.2% loss; Port Hedland, down 2.7 percentage points; Emerald, down 2.2 percentage points; Alice Springs, down 2.2 percentage points; and Colac and Warragul-Drouin, both down 2.1 percentage points.
The collapse of the growth rate in Warragul-Drouin is explained by the completion of Victoria’s desalination plant at nearby Kincumber over this period. Colac is most likely the result of a change in agricultural fortunes while Alice Springs has a long history of rise and fall depending on government spending programs. The rest are mining towns experiencing reduced worker flows.
Beside Sydney and Melbourne, there are some other towns to mention that experienced a rising rate of growth. Four of these towns liftet their rate of growth by more than one percentage point over the period. These towns are, in descending order of acceleration: Drysdale-Clifton Springs, near Geelong on the Bellarine; Gladstone-Tunnum Sands in Queensland; commuter town Morisset-Cooranbong between Sydney and Newcastle and agricultural service town Bairnsdale in Victoria.
The China migration and investment story is not driving these settlements. It is more likley demand from commuters and lifestylers as well as the opening of new land release programs.
Gladstone is evolving as Queensland’s power generation base. It will benefit from port and power infrastructure spending for years to come. The rising rate of growth in Bairnsdale is might result from a combination of lifestyle and a positive shift in agriculture fortunes.
