Overseas migration effects the rental market quicker than purchases. High level of migration is partly a result of the 2020 travel ban. A cap on migration would only increase market volatility.
As overseas property seekers’ interests in Australia’s property market rises and housing affordability stretches even further, discussions around migration and its impacts on the property market are heating up, according to CoreLogic head of research, Eliza Owen.
“But there are many other factors driving values and the rental market, and long term, strategic migration policy should not be influenced by short term volatility in migration and property markets,” she said.
CoreLogic’s report, Five things to know about migration and the housing market, unveils key insights into how migration is affecting the property market.
Overseas migration immediately impacts rental market
According to the report, changes in overseas migration most immediately effects the rental market and not purchases.
Owen pointed to the ABS data on on permanent migrant settlement outcomes, which showed that 60.8% of migrant arrivals in the five years to 2021 were renters.
Portion of permanent migrants renting or owning a dwelling, by year of arrival in Australia
“The incidence of home ownership was higher among permanent migrants who had been in the country for longer,” she said.
“As of 2021, this included 55.6% of arrivals between 2012 and 2016, and 70.6% of migrant arrivals before 2012.”
Restrictions increased migration figures
Australia closed its borders to non-citizens in late March 2020 and fully re-opened them to vaccinated and non-vaccinated arrivals in July 2022.
“By March 2023, Australia’s annual population growth hit 2.17%, the highest rate since 2008,” said Owen.
“Net overseas migraiton, which is overseas arrivals minus departures, is currently at records high annually, at 454,000 added to the population in the past 12 months.”