Australia’s population growth is set to slow over the next two years, with overseas students and long-stay visa holders forecast to stay away says BIS Shrapnel.
Forecasting group BIS Shrapnel has concluded that population growth will halve in Australia over the next two years. BIS Shrapnel senior economist Jason Anderson expects Australia’s net migration to fall from 300,000 annually to 145,000 over the next two years.
“The big shift in the last couple of years has been in terms of long-term visitors,” Mr Anderson said.
“These are people who come to Australia primarily on 457 visas – so skilled worker visas or as overseas student visas.
“In both cases they really are temporary residents, that is people who come here for a defined period of time.”
Recent increases in unemployment will see existing 457 visa holders finding it increasingly hard to have their visas renewed.
“It’s going to be harder for people to get those visas extended or we’ll be looking at a lot of those people now returning to their home country.”Mr Anderson said.
The slow down in population growth is expected to help cool off the heated housing market nationally, but also ease pressure on interest rates as a result.
“We should expect to see some dampening of household spending growth but there should also be some alleviation of inflationary pressure that has resulted from the strong demand growth for domestic goods and services,” Mr Anderson said.
“In terms of the housing sector, shortages will remain and there will be less upward pressure on interest rates.”
The drop in migrant numbers is not expected to cool the Western Australian market however, with the booming resource state significantly under supplied.
“We know that there is a big income injection coming from commodity prices that’s going to benefit Western Australia much more than the other states and with that in mind, the construction cycle is going to continue to be very strong in W.A.” Mr Anderson said.
“There is a need for more and more housing even with the lower migration levels. There is an undersupply developing so there will be support for the house building sector.”