Australia's migrant population is expected to grow by more than 700,000 between the 2022 and 2024 - transforming the property market.
The intake of migrants will relieve Australia's skills shortage, support post-pandemic recovery, and ultimately benefit the country – representing 2/3 of the total population growth anticipated.
Melbourne is expected to have the highest growth rate of all capital cities at 20% with its population surpassing that of Sydney by 10,300 in 2032.
It was annoucned the government will give all states and territories combined a total of $2 billion to build more homes (June 2023) - estimated to provide between 4000 and 5000 homes.
In summary :
· Demand will outstrip supply
· Australia will experience a gross housing shortage
· House prices and rental prices will continue to surge
· The cost of living will continue to rise, beyond the median weekly income amount
Foreign migration can have a notable impact on the residential market, affecting both supply and demand dynamics on the residential market including:
1. Increased demand. Influxes of foreign migrants can contribute to increased demand for residential properties - often require housing, whether it's through purchasing or renting, potentially driving up property prices and rental rates.
2. Rental market dynamics. Foreign migrants may initially choose to rent rather than purchase property due to factors like temporary stays, unfamiliarity with the market, or finances. This can intensify competition, potentially resulting in higher rental prices and reduced availability .
3. Housing development. The increased demand may stimulate the residential construction sector as developers can respond by initiating new construction projects to meet specific housing needs.
4. Regional impacts. Foreign migration can impact specific regions as some locations may be more attractive to foreign migrants due to factors such as employment opportunities, educational institutions, quality of life, or cultural connections.
5. Economic contribution. Foreign migration can have positive economic effects, such as increased consumer spending, job creation, and economic growth - boosting overall economic conditions and investment in the real estate sector.
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