Office Market Monitor | 2022 4 Demographic trends In addition to economic conditions, demographic changes always have a significant impact on demand for office space. Right now, it is more important than ever to understand the population changes happening across Australia, as we move out of one of the greatest periods of demographic and social disruption. Population growth The good news for the office market is that overseas migration has recovered dramatically since borders reopened earlier in 2022. In fact, the March 2022 quarter saw the largest ever number (on net terms) of overseas migrants enter the country, at 96,107 people. The March quarter historically records the highest number of migrant entries each year, due to the academic year starting, and the previous largest number of migrants was the March 2008 quarter, when 93,462 migrants entered the country. While Australia has always been a migrant country, the patterns of migration have changed dramatically during the last 10 years, and this has had real impacts on demand for office space. Prior to the GFC (2008), overseas migrants settled evenly around the country, relative to the size of each state with 56% settling in NSW and Victoria. However, post-GFC, settlement patterns changed dramatically. Between March 2012 and March 2020, when Covid impacts started, 68% of all overseas migrants settled in NSW or Victoria. The dramatic increase in overseas migrants to our two largest states caused a dramatic shift in office demand, and in turn where developers sought to build new supply. Between 2006 and 2010, new supply was concentrated in the CBDs outside of NSW and VIC. Since that time, 3.16 million square metres of new supply has been built in Sydney and Melbourne CBDs, and only 2.27 million square metres in all other capitals combined. Overseas migrants generate office demand as they both fill and create the need for more white-collar jobs, particularly in the services industries (legal, finance, health, IT). Demographic overview and outlook In addition to economic conditions, demographic changes always have a great impact o demand for Australi ’s office markets. Right now, it is more important than ever to understand the demographic changes happening in Australia, as we move out of the greatest demographic and social upheaval we have seen in generations. Population growth The good news for the office market is that overseas migration has recovere dramatically since borders reope ed earlier in 2022. In fact, the March 2022 quarter saw the l rgest v r number (on net erms) of overseas migrants e ter the countr , t 96,107. The March quarter historically records the highest number of migrant entries each year, due to the acad mic year starting, and the previous largest number of mig ant w s the March 2008 quarter, when 93,462 migrants entered the country. Source: ABS While Australia has always been a migrant country, the patterns of migration have changed dramatically during the last 10 years, and this has had real impacts on demand for office space. Prior to the GFC (2008), overseas migrants settled evenly around the country, relative to the size of each state -60,000 -40,000 -20,000 0 20,000 40,000 60,000 80,000 100,000 120,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Annual Net Overseas Migration by State NSW VIC QLD SA WA TAS NT ACT GFC Impact 2009 - 11 Covid Impact 2020 - 21 Source: Australian Bureau of Statistics NSW VIC QLD SA WA TAS NT ACT Annual Net Overseas Migration by State Covid Impact 2020-21 GFC Impact 2009-11
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