Geographic Labour Mobility in Australia: Property Market Impacts

Employment is a relatively small driver for changing residence according to the Productivity Commission (PC), (Geographic Labour Mobility, 2014) (1). The PC estimates a move for work purposes to range between 10% and 17% of residential moves, with family housing type or other personal reasons accounting for around 80% of residential relocation divisions.  About 16% of Australia’s 11.5 million person labour force change residential location annually and around 38% every five years.(2)

Residential mobility by industry is remarkably similar except for mining and to a lesser extent Public Administration.  The end of the mining super-cycle will reduce the impact of mining significantly due to the end of the construction phases.

Net overseas migration from 2004 – 2014 has been driven by the growth in jobs in the Australian services and mining sectors.  The majority of employment growth has been in health, not the mining sector.  However, the mining sector has stimulated growth in National Income (around 10% from 2004 – 2013).

This service sector employment outcome has resulted in Melbourne and Sydney becoming major ‘gateway’ cities for Australia and attracting the majority of employment growth. This is reflected in national housing markets and MacroPlan expects this situation to persist for three to five years depending on housing price impacts and interest rate movements.

Queensland’s Labour Force grew most quickly in Australia over the past ten years (517,000) in comparison with Victoria’s (504,300) and NSW (485,900).  Queensland differentiates itself with 50% of growth in Brisbane and 50% outside in regions with Melbourne at 80% and Sydney 75% of their respective totals.

The resources super-cycle did not have a major impact on the Australian labour force.  The RBA has estimated the total direct and indirect effect at around a 2-3% increase over a seven year period.  Health sector direct and indirect employment are likely to be higher. The Productivity Commission (DOE 2014(a)p101) forecasts major growth in the service sector from 2013 – 2018 with job losses in mining.  As the graph below suggests, regional employment growth could be negative (Agriculture, Mining, Manufacturing) while employment grows quickly in capital cities.

As previously suggested, the levels of residential mobility as reflected in interstate migration are likely to remain relatively subdued (1.5% in 2000’s versus 2.0% 1990’s) due to the mining transition.

Lifestyle, family and amenity are back on the agenda for the key capital cities – Melbourne, Sydney, Brisbane and Adelaide.  High levels of service sector vacancies will continue to drive Net Overseas Migration and population growth in the Eastern Seaboard in this phase of the business cycle.  Economic and employment growth in Adelaide and Brisbane typically occurs late in the business cycle as property prices increase, out migration from Melbourne and Sydney begins and development opportunities with realistic yields dry up.  The current business cycle is unlikely to differ other than the potential negative employment impacts widely spread in regional Australia.

Main reason for changing residence by employment statusa HILDA waves 2 to 12 (2002 to 2012) Main reason for changing residence by employment status

Residential mobility by industry of worker Per cent moved in the previous year, 2011

Residential mobility by industry of worker

Population growth in Australia, 1902-2012a,b Annual change as a proportion of population

Population growth in Australia

Sectoral shares of total output, 1949-2012 Nominal gross value added

Sectoral shares of total output

Employment change by city and sector, 2001-2011a

Employment change by city and sector

Projected change in employment by industry, November 2013-18

Projected change in employment by industry

About MacroPlan: MacroPlan’s experienced and qualified economists align their understanding of macro-economic forces with micro-economic variables such as geographic and industrial characteristics, demographics, labour market shifts, resource demand and commercial realities.  Contact Brian Haratsis, Executive Chairman today to discuss your property research requirements.

Brian Haratsis MacroPlan’s Executive Chairman is an economist and future strategist who has more than 30 years’ experience in providing detailed advice to governments and major corporate clients throughout Australia.
E: P: 03 9600 0500