The Australian Bureau of Statistics (ABS) releases its population projections every five years. In doing so, it forecasts what the Australian population will be 50 years into the future.
The ABS is forecasting Australia will have a population of between 34.3 million and 46 million people by 2071.
For context, the Australian population is 26 million today.
The big gap between 34.3 million and 46 million people comes down to the assumptions made on birth rates and life expectancy (together natural increase) and net overseas migration.
The most bullish scenario assumes our rate of natural increase would see the Australian population double by 2074. I would be 84 in 2074 so it is a little mind boggling to think that I might see an Australia double its current size.
The most conservative assumptions would not see our population double until 2129… in which case I’d be unlikely to see our population double (mind you with modern medicine you never know).
I wouldn’t be surprised if the Australian population doubles even sooner than 1974.
Here’s why.
- Natural increase
Before Covid, we were seeing a natural increase (i.e. more births than deaths) of 145,000 people per year.
Today, the natural increase is running at just over 125,000 people per year. This number dropped because our birth rate dropped through Covid.
The more conservative ABS population forecast assumes our natural increase in population reduces every year going forward.
The more bullish population forecasts assume our natural increase gradually jumps from current 125,000 to pre-Covid 145,000 between now and 2045, before drastically dropping to less than 100,000 people per annum by 2053.
I think we are, at the very least, likely to see the more bullish scenario play out.
- Net overseas migration
This is where things get interesting.
Before Covid, we were seeing an increase from net overseas migration equivalent to 230,000 people per year.
Net overseas migration will add a whopping 500,000 people in calendar year 2023.
The more conservative ABS population forecast assumes our net overseas migration averages pre-Covid levels to 2030, before dropping below 200,000 per annum thereon.
The more bullish population forecasts assume our net overseas migration runs above 300,000 per annum between now and 2030, before dropping below 300,000 per annum thereafter.
Again, I think we are, at the very least, likely to see the more bullish scenario play out.
I could make a case that even the most bullish ABS population forecast is too conservative. We have brought in 500,000 migrants this year and our unemployment rate has hardly changed. We have an ageing population that needs this migration to continue. And migrants often arrive in Australia just before the family formation years.
What does it all mean?
The population of Australia doubles within the next 72 years, if not sooner.
By a least 2030 the population of Australia will hit 30 million.
By at least 2050, the population will be nudging 40 million.
And population growth is the main driver when it comes to demand for housing.
The key is to invest in areas where that population growth is going to be most significant. That’s where the opportunity lies.
