Migration has always been part of the backbone of Australia, contributing to our strong multiculturalism and ability to withstand trying global economic conditions. It’s been important to our past, and it will continue to be important in our future.
The post-pandemic migration surge has been a big one though. It’s had some serious ramifications, particularly on the housing industry, where it has placed pressure on an already struggling sector.
The scope of the increase in migration is laid out in the Australian Bureau of Statistics Overseas Migration Report, which they put out every year. Today we’re going to take a look at the latest statistics and see what it has meant for the housing industry in Australia.
The Size of the Surge
Net Overseas Migration is the net gain or loss of population from people migrating to and from Australia. If more people are arriving than leaving then there is a net increase. The last couple of years in Australia have seen bigger numbers arriving on our shores (737,000 migrant arrivals in 2022-23), while departures have stayed relatively stable.
This has led to record net migration, with the figure reaching 518,000 people in the financial year ending June 2023.
To put that into perspective, it’s much bigger than the entire population of Canberra. Our population grew by more than the size of our nation’s capital in a single year!
Who are the Migrants?
The majority of the migrants arrived from India, China and the Philippines. The migration program is currently designed to overcome skills shortages, attracting people with specialist skills we’re lacking here.
Much of this has been in the form of international students, coming to train in Australia, develop their skills and continue to live and work here. These students are also a big contributing factor to the economy, as they pay high fees and contribute to national expenditure.
International students are joined by trained career professionals coming to fill skills voids in various industries. These professionals are generally in their younger years, between 25 and 34, and will be tax-paying contributors to our society.
Increase in Housing Demand
Most of these migrants come into jobs and universities located in our capital cities like Brisbane, and they all need accommodation. This has placed incredible pressure on our housing market, with most of them looking for rental accommodation upon arrival and some for property to buy. This has spread out to regional areas too.
This has contributed to a rental crisis the likes we haven’t seen before in Australia. Increased demand and not enough supply has caused rents to skyrocket, and there simply aren’t enough vacant homes to go around.
As a result, renters who can’t find a property are becoming potential home buyers, pushing up demand and prices for real estate.
Other Pressures on Housing
While increased demand from migration is a contributing factor, other issues are at play that have hampered the supply of homes to the market.
For a start, dwelling approvals are historically low. Australia simply isn’t building enough homes. The approvals of standalone homes is down 40% from the peak three years ago, and the inability to get them approved is exacerbating the rental crisis.
The problem is though, even once approved construction times are extremely long. The industry is hard hit by the skills shortage, and logistical delays have hampered the supply of materials to Australia. A new build is taking a long time, and unfortunately even established builders have been going bust mid construction.
With purchasing a new build taking so long and proving so costly, buyers have turned to established homes, pushing their prices higher.
Leverage the Demand
We always say that the best time to sell is the time that suits you and your family, when the need to move onto the next chapter in your life beckons. If that time is now, and you want to leverage the high demand for property at the moment, get in touch. My and my team are here to help, and would love to put our tried and tested auction strategies into action for you. Call me on 0412 47 588.
