{"id":6146,"date":"2015-10-26T01:00:07","date_gmt":"2015-10-25T14:00:07","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=6146"},"modified":"2015-10-26T01:00:07","modified_gmt":"2015-10-25T14:00:07","slug":"what-this-slowdown-is-going-to-do","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/what-this-slowdown-is-going-to-do\/","title":{"rendered":"What this slowdown is going to do? &#8211; Michael Yardney"},"content":{"rendered":"<p>&nbsp;<br \/>\nRecently the Australian Bureau of Statistics warned our population growth is slowing. So does slowing population growth pose a risk to property? <strong>Michael Yardney<\/strong>,\u00a0from Metropole Property Strategists, discusses whether this slowdown pose a risk to our economy and pull the rug out from under our property markets?<br \/>\n&nbsp;<\/p>\n<h4>Transcript:<\/h4>\n<p><b>Kevin:<\/b>\u00a0 Recently, the Australian Bureau of Statistics warned that our population growth is slowing. I\u2019m just wondering what this slowdown is going to do. Could it pose a risk to our economy? Maybe pull the rug out from underneath our property markets?<br \/>\nLet\u2019s find out. Michael Yardney from Metropole Property Strategists has a view on this.<br \/>\nHi, Michael.<br \/>\n<b>Michael:<\/b>\u00a0 Hello, Kevin.<br \/>\n<b>Kevin:<\/b>\u00a0 Michael, I think you may have written about this in your blog, Property Update, haven\u2019t you?<br \/>\n<b>Michael:<\/b>\u00a0 Yes, I did. It should be on the mind of all smart property investors.<br \/>\n<b>Kevin:<\/b>\u00a0 What do the population figures show?<br \/>\n<b>Michael:<\/b>\u00a0 Firstly, the Australian Bureau of Statistics estimates our population growth is now at about 1.4% per annum. That\u2019s much lower than it was a while ago, and the whopping majority of those people are actually in the four big states \u2013 New South Wales, Victoria, Queensland, and Western Australia.<br \/>\n<b>Kevin:<\/b>\u00a0 This is the lucky country; why don\u2019t they want to come here? How much is it slowing?<br \/>\n<b>Michael:<\/b>\u00a0 It\u2019s really due to lower migration. We still have more natural population growth \u2013 we\u2019re making more babies than people are dying \u2013 but people aren\u2019t coming here as much, migration has slowed down. We\u2019d only added about 143,000 people from overseas last year.<br \/>\n<b>Kevin:<\/b>\u00a0 Has it got anything to do with the end of the mining boom?<br \/>\n<b>Michael:<\/b>\u00a0 Yes, you\u2019ve picked that well. The mining boom brought lots of new migrants to Australia, and the figures from the Bureau of Statistics show the impact of the mining investment slowdown has made the resource focused states \u2013 particularly Western Australia and the Northern Territory \u2013 drop in migration considerably. In Western Australia, it\u2019s dropped 71% over the last couple of years.<br \/>\n<b>Kevin:<\/b>\u00a0 Goodness, gracious. Something is obviously having an impact there. Is it a problem, Michael?<br \/>\n<b>Michael:<\/b>\u00a0 Let\u2019s put it in context. Australia\u2019s population still increased last year by more than 316,000 people. If you look at the world in general, we still have one of the fastest growing populations amongst the advanced economies. It is well above the long-term averages, but over the last couple of years, we\u2019ve just had massive population growth related to the mining boom jobs creation needing people to come in to support the boom.<br \/>\n<b>Kevin:<\/b>\u00a0 Before we get to its meaning for property, Michael, what\u2019s it going to do to the economy?<br \/>\n<b>Michael:<\/b>\u00a0 I think there\u2019s some positives and negatives, Kevin. On the positive side, what it has done is keep unemployment on the low side. Remember a while ago when people were talking about an unemployment rate of 8%, 9%, or 10%? Well, that didn\u2019t really happen.<br \/>\nThe other positive is that it\u2019s going to keep our Australian dollar on the low side, and I think this has a couple of positive impacts. First of all, we\u2019re going to have more overseas visitors coming here because a low Australian dollar is going to be cheap for them. That\u2019s good for our economy. It also probably means that Australians are going to travel more extensively domestically, rather than overseas. That\u2019s also good for our economy.<br \/>\nI think the last upside of our slower population growth causing a lower Australian dollar is that Chinese capital is still going to come in, and they\u2019re going to look for investments locally.<br \/>\nOn the downside, a slower population growth means we\u2019re going to have a slower economy, which \u2013 depending on which way you look at it \u2013 is probably going to leave interest rates on the low side, maybe even having to drop a bit to stimulate the economy, because we haven\u2019t got more people consuming.<br \/>\n<b>Kevin:<\/b>\u00a0 What\u2019s the direct impact to property, Michael?<br \/>\n<b>Michael:<\/b>\u00a0 Possibly the biggest impact from population growth undershooting expectations is that during our recent housing boom, we\u2019ve been building lots more houses, and there are so many on the drawing board and so many coming out of the ground, and they\u2019re for people who may not even show up. That\u2019s potentially one of the issues in some locations in Australia, particularly in the CBD and the off-the-plan and a lot of those new house and land package areas.<br \/>\n<b>Kevin:<\/b>\u00a0 The bottom line, Michael?<br \/>\n<b>Michael:<\/b>\u00a0 We\u2019re told our federal government is keen to get us back into surplus from having a budget deficit, but a slower population growth, slower economic growth, is going to make that a lot harder for us.<br \/>\nI think some segments of the property market are going to find themselves in surplus. This happens every property cycle, doesn\u2019t it Kevin?<br \/>\n<b>Kevin:<\/b>\u00a0 Yes, it does.<br \/>\n<b>Michael:<\/b>\u00a0 Times are changing, so I think one is just going to have to look more carefully at which areas are going to have economic growth, which areas are going to have wages growth, and know that it\u2019s not going to be all over Australia. Our population growth is fragmented, creating jobs growth fragmentation, creating economic and property growth being fragmented into different segments.<br \/>\n<b>Kevin:<\/b>\u00a0 So the answer is: keep listening to Real Estate Talk, and keep reading Michael\u2019s blog, PropertyUpdate.com.au.<br \/>\n<b>Michael:<\/b>\u00a0 Thanks for that great plug, Kevin.<br \/>\n<b>Kevin:<\/b>\u00a0 Thanks, Michael. I\u2019ll talk to you again next week.<br \/>\n<b>Michael:<\/b>\u00a0 My pleasure.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>&nbsp; Recently the Australian Bureau of Statistics warned our population growth is slowing. So does slowing population growth pose a risk to property? Michael Yardney,\u00a0from Metropole Property Strategists, discusses whether this slowdown pose a risk to our economy and pull the rug out from under&#8230;<\/p>\n","protected":false},"author":176692471,"featured_media":6147,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10,13,25],"tags":[101],"class_list":["post-6146","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kevin-turner-sponsored-channels","category-latest-story","category-sponsored-channels","tag-podcast"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What this slowdown is going to do? - Michael Yardney - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/what-this-slowdown-is-going-to-do\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What this slowdown is going to do? - Michael Yardney - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"&nbsp; Recently the Australian Bureau of Statistics warned our population growth is slowing. 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