Adelaide has second slowest capital city population growth
Regional population data released by the ABS earlier this week reveals that Adelaide had the second slowest rate of capital city population growth in 2016/17. The total estimated resident population for the Greater Adelaide Capital City Statistical Area rose by 0.7 per cent, or 9,648 persons, over the year to 30 June 2017. Only Darwin had a slower rate of population growth over this period (0.5 per cent), while population gains were also relatively sluggish for Perth (1.0 per cent) and Hobart (1.1 per cent).
The fastest growing capital city populations in 2016/17 were Melbourne (2.7 per cent), Brisbane (2.0 per cent) and Sydney (2.0 per cent). In fact, these three cities accounted for almost 71 per cent of the net change in Australia’s population over this period, despite accounting for 50 per cent of the nation’s estimated resident population. This result in part reflects that these cities are major arrival destinations for overseas migrants.
Population growth has been slower in rural and regional areas relative to capital cities across all states and territories, and South Australia is no exception. While the Adelaide population rose by 0.7 per cent in 2016/17, the population in the rest of the state rose by only 0.2 per cent. Natural population increase (i.e. births minus deaths) for both the metro and non-metropolitan areas has been broadly offset by net internal migration losses, with overall population growth being dependent on net overseas migration.
Unemployment rate improves slightly
The ABS’s March labour force survey results reveal that labour market conditions have improved a little in South Australia. The state’s trend unemployment rate edged down from 6.0 per cent in February to 5.9 per cent in March. The national unemployment rate rose slightly to 5.6 per cent. Western Australia recorded the highest unemployment rate of any state or territory (6.4 per cent), followed by Queensland and Tasmania (6.0 per cent respectively).
The ABS notes that labour force participation at the national level reached an all-time high in March (65.7 per cent). Although labour force participation in South Australia has improved over the past year (up 0.5 percentage points to 62.8 per cent), the extent of improvement has been less than has occurred nationally (up 0.8 percentage points), while the state’s participation rate remains below its peak of 63.8 per cent reached in November 2008. South Australia’s lower participation rate in large part reflects the state’s relatively older age structure of the civilian population, but also potential discouraged worker effects due to weak labour market conditions over the past 5 years. In our December 2017 Economic Briefing Report we estimated that South Australia’s age adjusted participation rate was 0.6 percentage points lower than the corresponding national figure in late 2017.
Housing lending activity declines, but loans for new home construction remains steady
Data on home loan lending (“housing finance commitments”) are a leading indicator of residential building and real estate market activity. The most recent data from the ABS show that home lending activity in South Australia has fallen over the past year. The number of home loans for owner occupation in February 2018 in trend terms was down 5 per cent compared to a year earlier. Nationally, home lending activity fell by 0.2 per cent over this period.
The value of approvals for both South Australia and Australia rose over the past year (1.6 and 5.8 per cent respectively), which given the fall in number of approvals indicates that average loan sizes have risen.
The decline in the number of home loan approvals for South Australia over the past year was driven by reduced lending for established housing rather than new home construction. In original terms, the number of loans (excluding refinancing) for established dwellings in the three months to February 2018 was down 4.6 per cent compared to the corresponding period a year earlier. In comparison, approvals for new home construction was down just 0.2 per cent between these periods. Maintenance of lending activity for new home construction suggests that residential construction activity levels will be maintained in the short term, although changes in investor activity could alter this assessment.
This post was updated to correct the previous peak participation rate.