A trickle of migrants may be enough to keep property prices in the black, but an extra million people would benefit the entire economy, according to a top economist.
“It will be one thing to decide to enhance skilled migration in a competitive global market post-pandemic, and another to achieve it,” KPMG chief economist Brendan Rynne cautioned in new research.
He believes Australia should make a concerted effort to increase its intake from nations where people tend to migrate to the United Kingdom and Canada.
More new Australians from Poland, Ireland, Germany, and the United States would be a result of this.
“We’ve seen a huge drop in foreign migrants landing in Australia during the epidemic, to the point where our net overseas migration figures have turned strongly negative for the first time since World War II ended,” Dr Rynne said.
According to the most recent official population figures, net overseas migration would be negative this fiscal year before gradually increasing to 235,000 per year in 2024-25.
In 2025, the population will be roughly 700,000 lower than it was before the pandemic.
Over the more average ten years to 2019, net overseas migration added around 10% to Australia’s population.
But, according to Dr Rynne, if Australia wants to equal that 10% population growth trajectory through foreign migration, it would need to add about a million people to official projections.
Through reach the 10% target, little over 350,000 individuals would be needed each year from 2022-23 to 2028-29.
According to him, if the targets are met, Australia’s GDP will be roughly $120 billion higher by the end of 2028-29, resulting in a 4.4 percent larger economy.
However, Australia is not alone in recognising the economic, social, and cultural benefits of skilled migrants, who are typically younger than the average worker in our ageing society.
According to UN data analysed by KPMG, Australia had the seventh-largest influx of international migrants in the five years leading up to 2019, with roughly 820,000 persons.
The majority of visitors were from China (132,000), India (120,000), the United Kingdom (56,000), the Philippines (40,000), and Malaysia (40,000). (31,000).
Between 2015 and 2019, the United Kingdom and Canada, both regarded competitive destinations to Australia, welcomed 1.14 million and 532,000 migrants, respectively.
The Department of Home Affairs has selected 44 vocations as important skills for Australia’s COVID-19 pandemic response and economic recovery.
In July, Immigration Minister Alex Hawke amended the list, adding pharmacy workers to the list of applicants who were given priority over others.
“As Australia recovers from the pandemic, the priority of these occupations will shift,” a Home Affairs official said.
The Temporary Skill Shortage, Skilled Employer Sponsored Regional (Provisional), Employer Nomination Scheme, and Regional Sponsored Migration Scheme visa categories are all affected by the Priority Migration Skilled Occupation List.
According to KPMG modelling, each additional migrant boosts GDP by roughly $130,000 per year, owing primarily to household expenditure of around $70,000.
In the countryside and cities, house prices will receive new support, even if it is only a trickle now.
House prices could grow another 7% in 2022, according to CommSec chief economist Craig James, thanks to still-low mortgage rates and the current rate of overseas migration to Australia.
According to CoreLogic statistics issued on Tuesday, certain rural markets climbed by more than a third in 2021, exceeding a 20% increase in home values across the capital cities.
As foreigners return, CoreLogic research director Tim Lawless anticipates rents to climb, particularly for inner-city units in student-friendly areas.