Simon Kuestenmacher, Co-Founder & Director at The Demographics Group.
The impact of the COVID-19 pandemic on our inner cities and CBDs has been in the headlines — plenty of doom and gloom – but many of the tendencies we are witnessing, according to lead demographer Simon Kuestenmacher, are not new.
Kuestenmacher, the director and co-founder of The Demographics Group, said at a recent Property Council event at the Crown in Perth that it is true that residents have shifted from the centre city to the outskirts and that city populations have declined.
He noted that international students and skilled migrants were among those who left the country in the face of the pandemic. Another factor is the regular migration of people out of cities and into the suburbs; the only difference is that there was no one to replace them.
“This is a trend that will continue, it is simply the fact that the millennials, after procrastinating for a long, long time, finally started to have kids,” he said.
“Now they waited until the mid-30s, to have kids…. it just happened to coincide with a pandemic.
“And so, you have the millennials that lived as couples in one- and two-bedroom apartments in the inner suburbs, they add 1.7 kids to their families. That means they need a bigger house, a bigger plan, a bigger apartment. And so, they move to wherever the hell they can afford such an apartment, they essentially pick up their belongings, they go on the highway, and they drive up until wherever they can buy a house.”
According to the Australian Bureau of Statistics, people living in our capital cities declined by 26,000 in the 2020-21 financial year with the decline comprised net overseas (-84,700) and internal (-49,200) migration losses and natural increases (107,900).
Melbourne suffered the greatest loss, losing 60,500 while Brisbane grew the most, adding 21,900 people. It was the first time since 1981 that Australia’s regional population grew more than the capital cities.
For the 2020-21 financial year, Australia recorded a net loss of 88,800 people – the first loss since 1946 and second lowest on record with more people departing from, than arriving into Australia.
Looking forward, the most recent federal budget forecasted net overseas migration to reach 180,00 in 2022-23 and 213,000 in 2023-24.
On the international student front, according to the ABS, in March 2022 there were 28,230 international student arrivals to Australia, an increase of 28,000 students compared with the corresponding month of the previous year. The number of student arrivals in March 2022 was 60.9 per cent lower than the pre-COVID level in March 2019.
Kuestenmacher said the moves out of the inner city and into the fringes is nothing new and mainly unrelated to COVID, so it isn’t time to board up the cities just yet, but it will take time to return to ‘normal’.
“This is exactly the area where new migration will take place,” he said.
“Once borders are open, once migrants come in, migrants always behave in the same way in the housing market, they move as close as humanly possible to the one address that they know. And the one address they know is their university or office location and they move into the same suburbs that they have always moved in.
“So, the inner city will revitalise – it’s a matter of time how fast it revitalises. I can say this because I don’t have billions of dollars invested into the inner city. If you invested in it, it’s much harder to accept this, but growth will occur.”