Australian population growth surges on

There remains action on the policy front that has the potential to swing the medium to long-term outlook. In the lead-up to the 2023/24 Budget, the Federal Government released its Migration System Final Report.

Policy actions have been flagged for later in the year, specifically around ensuring transparent and competitive pathways from temporary to permanent migration. While the surge in temporary migration represents a boon for service exports that should lower heat in some parts of the labour market, it also adds to pressure on the housing stock, which is positioned for a sustained undersupply holding deep into the back half of the decade.

This research report expands on the following points:

• Net overseas migration (NOM) has continued to pick up steam, estimated to have reached 490,000 in FY2023. This result is 63% above the previous record in FY2009 and propels Australia’s annual population growth rate to 2.32%.
  
• Temporary migration is driving the overshoot, with strong gains across all key visa categories. Total grants for offshore student visa applicants reached 106,009 in Q2, 71% above the same quarter in 2019. The combination of a favourable exchange rate, increased working rights compared to pre-pandemic, a strong labour market, and considerable stored demand from almost two years of a closed border has triggered a boom in international student volumes.
  
• Temporary worker visa grants for offshore applicants totalled 16,015 in Q2 2023. While up on a year ago, momentum has waned in quarterly terms. Along with other channels of temporary migration (working holidaymakers, visitors etc.), it has become increasingly dwarfed by the student flow.