Population boom to cause critical supply shortage

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Figures released by the Australian Bureau of Statistics (ABS) showed that Australia's population grew by 2.1% to 21,779,000 in the 12 months ending 31 March. This level of growth has not been seen since the 1960s.

The nation appears to be on target for a population of 35m by 2049, as predicted by Treasury last week.

 However, Professor Graeme Hugo, a demographer at the University of Adelaide, told yourmrotgage.com.au this level of population growth was not sustainable.

 "This is really the peak of a brief period of very high population growth, which has been fuelled by the economic boom in the period leading up to the Global Financial Crisis," he said. The figure of 35m was, for Hugo, "really an upper-limit figure" and not necessarily realistic.

 Every state and territory recorded positive growth in the year to March, with WA's population increasing the fastest at 3.1%.

 According to the Housing Industry Association, given the current rate of population increase, Australia will suffer a supply shortfall of over 200,000 dwellings by 2013, pushing rents higher and sparking an affordability crisis. Hugo predicted the bulk of the demand would come from continued strong migration, despite the government recently cutting the skilled migrant intake. New immigrants would converge largely on the centres of capital cities.

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