More and more migrants are looking for places to live, and it’s what drives the economy in Australia these days. But what’s going to happen once the labor force reaches its flatline?
Now that the commodities boom is over, it’s time to usher in another boom, the international migration boom. According to Professor Graeme Hugo, a demographer from Adelaide University, migration is one of Australia’s defining features in weaving its story for the past thirty years.
Mr. Hugo stated, “The demography of a few countries has been as strongly affected by international migration as Australia. Net migration on average has contributed around half of Australia’s population growth over the last thirty years.”
Asia’s transformative era began in the early eighties, with the arrival of Indochina refugees. That began the immigrant surge to Australia, from countries in southeast Asia, India, China, the Middle East, and also Africa. 20.6% of the population noted in the 1981 census came from another country, and by 2011, it has increased to 26.1%.
It’s a fact that one of the aspects that drive the growth of the Australian economy today is migration. A perfect example of this kind of bubble is Las Vegas. Those who arrive need a place to stay. This demand is met by construction, and this demand for construction is met by the need for more construction workers. What labourers did was to move to Las Vegas so the work could be done and the need for housing met but they new influx of construction workers also meant a need for even more housing.
After decades of amazing growth it appears the demand for new housing in Las Vegas has stopped. A good indicator of this plateau is a flatline of the number of workers living in Vegas at around 1,000,000 since 2010.
Las Vegas was once considered the United States’ foreclosure capital, but investors have significantly helped in increasing its real estate prices. According to the Greater Las Vegas Association of Realtors, a single-family home’s median price had an increase of of 32.8% from the previous year. Realtors were even known to look for people to sell their homes!
In June of 2003, it has also been reported that New Zealand saw an increase of three thousand migrants, both permanent and long-term, which was the most that it got for that year. The annual net inflow rose to seventeen thousand five hundred, compared to the net loss of two thousand three hundred from last year. The average gain was eleven thousand three hundred, which was well above average over the past twenty years.
This turnaround can be explained by the reduction in Australia’s net loss of people, which was about twenty three thousand five hundred in the year to October, which was fifteen thousand eight hundred fewer compared to the previous year.
According to the Felix Delbruck, the economist from Westpac, “Net immigration is now clearly in a cyclical upswing, partly due to more people moving to Auckland and Canterbury, but mainly due to fewer people moving to Australia as job prospects there have cooled.”
“We expect net immigration to peak at over thirty thousand next year,” Mr. Delbruck also added, “which would make this the biggest migration cycle since the early 2000s. The upturn in migration is a significant reason why we expect house prices to keep rising next year, albeit at a slower pace, despite lending restrictions and higher mortgage rates.”
There is a migration pendulum that keeps swinging from New Zealand to Australia, but cannot be considered a long-term issue. If there’s a dramatic increase for the demand of commodities, it will swing back to Australia. But what if migrants find better options in other countries? What if New Zealand’s economy prove to be more stable, providing more jobs, better jobs compared to what Australia has to offer? What if lesser people would be willing to move, because of the declining birth rate?
The level of immigration Australia has had for the past three decades may never come back. The locals might feel the change pleasant looking at the economic trends and the demographic.