MIGRATION AND THE HOUSING MARKET
Migration, housing prices, and rental trends! These are perhaps some of the hottest topics in the land down under these days. And today we're going to dive deep into the Australian migration strategy and how it is reshaping the housing market.
Fact 1: New Migrants Love Renting... Initially!
Most migrants opt to rent rather than purchase a home shortly after moving. Data shows that 60.8% of the migrants who arrived in the last five years chose to rent. The longer they stay, the more likely they are to purchase a home. For instance, 70.6% of those who arrived before 2012 now own their dwelling. And guess what? A whopping 91.6% of temporary skilled visa holders and 83.5% of student visa holders were renters in 2021!
Fact 2: The Migration Boom - A Catch Up Game?
Remember when Australia shut its doors in March 2020 and only reopened in July 2022? That's partly why we're seeing such high migration now! In fact, with an annual population growth of 2.17% by March 2023, a record of 454,000 people were added in the past year, which is double the pre-COVID decade average.
Fact 3: Rental Markets Felt The COVID Pinch
During the COVID migration ban, areas historically popular with migrants like Melbourne's South East and Inner SA4’s as well as Sydney's Inner South West and Paramatta saw sharp fluctuations in rent values. This imbalance led to a whopping 18% growth in rents after the borders reopened in July 2022! But remember, this might be a temporary phase, and the housing markets will adjust in time.
Fact 4: Other Factors Also Play A Role
While migration does influence the housing market, other factors like the decreasing average household size, aging population, and changing marital status trends are also contributing to the demand. So, migration is just a piece in the larger housing puzzle.
Fact 5: To Cap or Not To Cap Migration?
Sure, reducing migration could ease some demand pressures on housing. But think about the trade-offs! Migrants often bring valuable skills. For example, skilled migrants can help address current housing shortages. The UK even relaxed its visa rules to attract construction talent, and Western Australia is offering grants to skilled migrant construction workers.
Wrapping Up
While high migration may be influencing the housing market and rent values, it's essential to look at the bigger picture. Short-term fixes like temporary migration caps can create more problems than they solve. Instead, a balanced, long-term strategy focused on housing supply and migration could be the key.
Lachy Reid # 0412 457 024
