It’s amazing that during Australia’s most recent housing price booms, commentators and policy makers of all colours argued that the prices were not been driven by mass immigration, but rather a lack of supply.
Now that immigration is projected to crash, we have these same commentators claiming that it will put heavy downward pressure on property prices, especially in the migrant hotspots of Sydney and Melbourne:
Over recent months, we’ve seen Domain and CoreLogic warn of a potential property correction on the back of lower immigration.
Now property market players and academics have joined the chorus, claiming that a “lack of migration to Australia due to coronavirus is expected to hit the property market hard”:
Property buyer Rich Harvey specialises in buying property for expat clients.
“When COVID-19 hit, it really hit quite dramatically, we saw our phones go dead the week after the lockdown restrictions were in place. We’d had a pretty good run in February,” he said.
Leading property academics say the property market’s ability to rebound will depend in part on how quickly migration numbers can recover to pre-COVID-19 levels.
“Until population growth recovers to something like pre-COVID levels then it’s going to have a negative impact on the housing market,” Curtin University professor and chair of the Western Australian Housing Industry Forecasting Group Steven Rowley said…
He said the biggest impact will be felt in the major cities like Sydney and Melbourne where the bulk of population growth comes from net overseas migration…
Nigel Stapledon is a research fellow in real estate at the University of New South Wales.
He said Labor’s calls to push migration lower than the pre-COVID-19 levels would have a negative impact on the housing market…
“We are probably going to have two years of migration downturn, but it could bounce back after that. It may be that we get a strong kickback, which would specifically be good for the property market,” he added…
“But how quickly net overseas migration bounces back will impact the recovery,” he said.
Exorbitant property prices in Sydney and Melbourne have prevented nearly an entire generation from owning a home, while consigning the rest to a lifetime of mortgage servitude and shoe-box living.
Therefore, removing mass immigration – a key demand driver – will significantly improve housing affordability, in addition to consign fewer people to live in tiny apartments.
Lower immigration is exactly what the Australian economy needs and should be greeted with joy from commentators and the general public.
