Houston, there’s a problem Down Under. The latest population data released by the ABS contains arguably the most serious sign yet of an awful lockdown legacy in the making. Australia’s two largest cities have seen a 245,000 negative swing in their combined populations over the first 12-months of COVID-19.
During the years directly before the germ arrived, Sydney and Melbourne had become accustomed to their respective populations increasing by 75,000 and 115,000 per year. The 12-months to March 2021 saw the population of both cities decline by an estimated 6,000 (Sydney) and 50,000 (Melbourne). Ouch!
Australia’s total population only increased by 35,684 (our nation’s slowest population growth rate in more than 100-years). Pre-COVID, it typically increased by 350,000 to 400,000 per annum.
Conversely, the population of the forever popular regional Australia increased by an estimated 51,000 over the year ending March 2021.
In just 12-months, the combined population decline of Australia’s two largest cities is big enough to create an entire city the size of Mildura (Australia’s 40th largest city), Noosa, Dubbo or Albury. It’s astonishing.
As outlined by Propertyology in May 2020, Sydney and Melbourne were always going to be Australia’s two most problematic property markets.
The damning population loss is evidence of the enormous psychological and financial impact that lengthy lockdowns have already had on tens of thousands of people in Australia’s two most densely populated cities.
It’s also reflected in the 42,142 vacant residential dwellings (combined) in Sydney and Melbourne. This is a staggering 2.5 times more the 16,714 total vacant dwellings for the entire rest of Australia. Nuts!
And logic would suggest that it is only a matter of time before we all learn of unprecedented volumes of job losses.
Both cities have now been in hard lockdowns for between 100 and 200 of the last 500-days (and counting).
From the very start of COVID, we’ve held strong concerns for the lockdown impact on the 500,000 jobs within the CBDs of both Sydney and Melbourne.
While plenty of white-collar businesses can still operate from home offices, the same cannot be said for restaurants, cafes, clothing stores, hotels and assorted other retail businesses.
The revenue of those businesses depend heavily on all of those office workers and university students, whom are also long gone.
According to Property Council of Australia, only 40 percent of Melbourne’s CBD offices and 60 percent of Sydney’s were occupied in April this year.
The scrambling of the capital city CBD fried egg is well and truly in motion.
Only time will tell exactly how many jobs Sydney and Melbourne end up losing.
The combination of population patterns, economic instability and housing supply trends of Australia’s two biggest are current fundamentals not too dissimilar to that of our fourth biggest city in 2013. We all know how that unfolded.
Given that Australia’s two most congested and most expensive cities have been in another lengthy lockdown subsequent to ABS’s population data for March, one can imagine the population loss will continue (at least) through to the end of the 2021 calendar year.
Melbourne and Sydney’s demand for housing runs much deeper than the 56,000 combined population decline during the first 12-months of this germ.
For each business that permanently closes, the ability to pay household mortgages and rents of every business owner is in jeopardy. Ditto to tens of thousands of direct staff, the staff of associated other businesses that once supplied goods and services, and landlords (commercial and residential).
Over the first 12-months the germ, both Sydney and Melbourne had a net loss of 32,000 people to net migration. This trend is likely to continue.
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