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Can you imagine Perth at 6.6 million 04/12/2013

Long-term projections didn’t expect the rapid population growth Perth has experienced in recent years and therefore the Directions 2031 forecast of 2.2m is now more likely to be reached 15 years earlier.

Perth has come a long way from when it was a small town which only first started to grow with the gold rush bringing a rush of eager migrants keen to cash in the discovery of gold near Kalgoorlie and there is significant change still to come. The latest population projections from the Australian Bureau of Statistics suggest Perth’s population could increase to as high as 6.6 million over the next 50 years.

Perth’s population has experienced strong population growth in recent years, led by record migration – mostly uncapped temporary migration (i.e. 457, student and long-term holiday visas) – which was very difficult to predict and this has made some recent forecasts look very out-of-date.

Perth’s population increased at 3.6 per cent over the year to June 2012 and at between 3.7 and 4.1 per cent per annum recently – and more than Sydney’s population on aggregate terms, which is a city of 4.7 million.

Perth’s population is forecast to hit two million early next year but easing migration is then expected to see population growth fall to between 2.4 and 3.4 per cent per annum by the end of the decade. Population growth rates are subsequently expected to continue to decline as fertility rates and migration falls, with growth rates falling to as low as 1 per cent per annum by 2061.

The mid-range forecasts suggest an annual increase of around 70,000 persons (on par with current levels) over the next several decades, whilst the high migration projections suggest that although the rate of growth will decline the annual increase will lift to in excess of 100,000 persons by 2041.

Of note, Perth has been Australia’s fourth most populous city since overtaking Adelaide in 1984, but this looks set to change. The mid-range projection suggests that Perth’s population will overtake Brisbane’s in 2028 at just over three million. Moreover, Perth will continue to be the fastest growing capital city in Australia over the next 50 years.

The latest ABS forecasts are much higher than previous ABS estimates and also state government estimates.

Directions 2031 and Beyond population forecasts are looking very unrealistic. The 2031 forecast of 2.2m for Perth and Peel is now forecast to be reached in the second half of 2016 – 15 years early!

The State Government has subsequently updated population forecasts in the WA Tomorrow report, however, these also look out-of-date.

The State Government forecast Perth and Peel’s population will be between 2.33 and 2.56 million in 2026 compared to the updated ABS projections of 2.71 and 3.07 million. In other words, the state government’s 2026 population forecast – which was published just last year – now looks more likely to occur seven years earlier in 2019.

Also of note in the latest forecasts is the very significant effect longer life expectancy has on population estimates. The proportion of Perth’s population aged 65 and older is expected to lift from 12.5 per cent in 2012 to between 19.9 and 22.3 per cent in 2061. In regional WA, there is an even more marked increase in older residents – from 11.7 per cent to between 24.3 and 25.5 per cent. Remarkably, across all of Western Australia over the next 50 years, the number of residents aged 65 and over is estimated to increase at twice the rate of the rest of the population.

Although downsizing is still a relatively small segment of the property market – a 2005 study that showed two-thirds of retirees wanted to stay in their present home – the residential decisions of this cohort will become increasingly important and the state’s housing stock will also start reflecting the changing needs of this demographic.

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