More than 60,000 people departed Sydney and Melbourne for other parts of the country in the 12 months to March 2021 which saw a greater increase in building approvals than in the capital cities. Source: Timberbiz
“The exodus of residents from Melbourne is a trend that has emerged following the COVID recession with more than 32,000 residents departing in the year to March,” HIA’s Chief Economist Tim Reardon said.
“Sydney also lost 31,600 residents to other parts of the country over the same time however, this is consistent with the trends of the past 20 years.”
Mr Reardon said the shift in population was the main driver of the tight rental market that exists across the country, other than in Sydney and Melbourne.
“Regional areas have seen a greater increase in building approvals than capital cities as the population shifts toward lower density areas,” he said
The 220,000 building approvals in 2020/21 is the most in a financial year since 2017/18.
“Given that the population is moving interstate and building new homes it is unlikely that they intend to return to Sydney or Melbourne,” Mr Reardon said.
“The shift in population out of Melbourne is a new trend and one that is compounded by the loss of overseas migration that has underwritten economic growth in Victoria for the past decade.”
ABS Housing Finance data released this week showed there were 94.4% more loans issued for construction of a new home than in the previous financial year. This is the most loans ever issued for construction in a 12-month period.
“HomeBuilder and other grant programs have also ensured that there were more loans issued to first home buyers in 2020/21 than in any previous financial year,” Mr Reardon said.
“Building approvals and issuing of loans for construction did fall in June, confirming that the bulk of new projects initiated under HomeBuilder have passed the last regulatory hurdles.”
