The latest “National, state and territory population” release by the ABS indicated Australia's population growth continued to moderate in the March quarter 2026, but remained high by pre-pandemic standards.
National trends
Australia's population reached 27.921 million at March 2026, an increase of 392,700 people (1.4%) over the year. Annual growth has fallen sharply from its post-pandemic peak of 661,800 in September 2023 and slipped below 400,000 for the first time since 2022, although it remains above the pace recorded through much of the decade before COVID-19.
The population grew by 130,887 in the March quarter, 4.7% below the 137,297 gain a year earlier. Annual growth continues to ease, albeit gradually.
Quarterly growth was stronger than a year earlier in New South Wales, Tasmania and the Australian Capital Territory, and only marginally lower in Western Australia. The slowdown was more pronounced in Victoria, Queensland, South Australia and the Northern Territory, although growth in these jurisdictions remained elevated.
Net overseas migration by state
Net overseas migration (NOM) remained the main driver of population growth, accounting for 77% of the quarterly increase and 74% of annual growth.
NOM added 101,000 people in the March quarter, down from 107,700 a year earlier. In the year to March 2026, it contributed 292,100 people, 17,400 (5.6%) fewer than in the prior twelve months. The rolling annual result was slightly below the Budget's 295,000 forecast for 2025/26, although the final financial-year outcome remains subject to June-quarter data and revisions.
Annual migrant arrivals fell 4.0% to 557,500, but departures also fell 2.2% to 265,400. The absence of a lift in departures, which should otherwise now be increasing given the earlier surge in arrivals, helps explain why NOM is easing gradually. Longer stays by some temporary migrants, including people moving onto graduate or bridging visas, are likely contributing.
Quarterly NOM was lower than a year earlier in every jurisdiction except Western Australia, Tasmania and the Australian Capital Territory.
Net interstate migration
In the March quarter 2026, Victoria and Tasmania moved into net interstate migration (NIM) gains alongside Queensland and Western Australia. Western Australia is now the most attractive state, with its net inflow of 2,875 exceeding Queensland's 2,491. Queensland's inflow was 42% lower than a year earlier, compared with a 4% fall in Western Australia. Rising housing costs may be reducing the relative appeal of both states to interstate movers.
Victoria's quarterly gain of 505 lifted its annual NIM balance back into positive territory, while Tasmania's quarterly gain of 264 left its annual year-to-March balance close to neutral.
New South Wales recorded a quarterly outflow of 4,970, an improvement from 5,617 a year earlier, but its annual outflow remained substantial at 20,818. Quarterly losses also narrowed in South Australia and the Australian Capital Territory, while the Northern Territory's outflow widened.
The interstate pattern is becoming more balanced, and becoming less of a driver in redistributing population between states. More than 100,000 people crossed a state border in the March quarter, 8% more than a year earlier after a sustained post-COVID decline. Greater mobility should help workers move to areas of stronger labour demand, although more data is needed before treating this as a sustained turnaround.
Natural increase
Natural increase contributed 29,900 people in the March quarter, reflecting 75,200 births and 45,300 deaths. It contributed 100,600 people over the year, but its share of population growth continues to decline.
The ABS materially revised 2024/25 births down from 300,300 to 291,500, while revisions to deaths were small. After reaching 308,700 in 2021/22, births have since settled at around 290,000-292,000 a year.
Preliminary quarterly births are initially measured by date of registration, with some adjustments made if registrations materially impact the births data for the quarter, and later revised to date of occurrence, which appears to have influenced numbers in some states in recent times. The March rebound to 75,200 births from 68,500 in December is likely to reflect a balancing out of some of these timing issues and not necessarily be read as a clear change in trend. Housing affordability pressures and demographic ageing continue to constrain the outlook for births.
Deaths reached a record 191,900 in the year to March 2026, up 3.1% from the previous year. This reflects Australia's ageing population and is likely to continue rising.
Natural increase may therefore fall below 100,000 in 2025/26, which would be the lowest annual total since 1945. Without a sustained lift in births, the longer-term trend remains downward.
Changes to immigration policy
Migration policy changes announced in September 2026 are intended to bring NOM down to the Budget forecasts. Key measures include:
Stabilising Working Holiday Maker application processing at three months and introducing ballots for second- and third-year visas with regional work requirements, capped at 45,000 and 5,000 places respectively, compared with 57,000 and 31,000 last year.
Restricting most student and graduate visa holders from adding family members, while limiting further study after course completion to a higher qualification level.
Prioritising onshore skilled applicants and occupations in healthcare, construction, education, law enforcement, defence, resources, agriculture, aquaculture and fishing.
Giving housing trades the same points recognition as university qualifications under the skilled migration points test.
The package also strengthens visa integrity by:
Applying a 'No Further Stay' condition to new visitor visas, preventing most onshore switches to another visa.
Allowing sanctions or deregistration of migration agents who encourage non-meritorious protection claims.
Increased efforts to deport the estimated 80,000 visa overstayers.
Together, the changes should place further downward pressure on NOM as they are progressively implemented over the next 12 months.
The most direct effects will come from shorter temporary stays and more departures. Relative to last year's volumes, the Working Holiday Maker caps reduce potential second- and third-year places by about 38,000, although the effect on NOM will not be one-for-one. Restrictions on student dependents, course progression and visitor-to-other-visa transitions should also reduce arrivals or shorten stays, while stronger compliance should lift departures.
The changes have been put in place with the aim of delivering a NOM inflow more in line with the Budget targets of 245,000 in 2026/27 and 225,000 per annum from 2027/28 onwards, rather than the historical overshoot that has occurred in recent years. In this context, it should not change the outlook too much, which has already been based on the Treasury forecasts outlined in the Budget.
Implications for housing demand
Annual population growth of 392,700 implies demand for about 190,000-200,000 dwellings, depending on household formation assumptions. Over the longer term, NOM of 225,000, together with natural increase and household formation within the existing population, is consistent with underlying demand of around 180,000-185,000 dwellings a year.
Both estimates exceed the roughly 177,000 dwellings expected to be completed in 2025/26. Although 205,250 dwellings were approved during the year, approvals do not translate immediately or fully into completions. The lift included a recovery in townhouse and apartment approvals, with larger projects taking several years to complete.
Quantify’s outlook is for approvals to retreat in 2026/27 as higher interest rates, weaker dwelling prices and investor tax changes weigh on feasibility and demand. The recent approval upswing is therefore unlikely to close the accumulated housing shortfall, particularly if the proposed changes to migration policy sustain net overseas migration at around 225,000 per annum as intended. Outside of a stronger correction in net overseas migration, this means rental markets and housing affordability will remain under pressure through to the end of the decade.
For further insight into national and state population growth, contact Angie Zigomanis at [email protected] or Rob Burgess at [email protected].
