CoreLogic has released its February Unit Market Update, which shows explosive growth in unit rents across the major capital cities in response to the big increase in migrant arrivals.
As shown in the next chart, annual growth in unit rents is tracking at more than 13% across Sydney (15.9%), Brisbane (15.3%), Melbourne (13.6%) and Adelaide (13.1%):
This surge in rents has come off a rental vacancy rate tracking at close to its lowest level in history. As shown below, unit vacancies across the combined capital cities were just 1.15% in January:
CoreLogic Economist Kaytlin Ezzy warned that pressures on renters will only worsen further in 2023.
“With overseas migration continuing to fuel rental demand for inner city apartments, vacancy rates across Sydney (1.4%) and Melbourne (1.0%) remain near record lows, despite worsening rental affordability”, Ezzy warned.
“The ending of China’s Zero COVID policy, along with changes in Beijing’s recognition of online education, is set amplify international student numbers, which are already set to surge higher in 2023”.
“Unfortunately for tenants, rental demand across these areas is expected to increase in the short-term”.
Indeed, international student visa arrivals ballooned in the latter part of 2022, which drove the annual growth in temporary visas to all-time highs, according to the federal government’s latest Population Statement:
This week, it was revealed that a record 360,000 visa applications were lodged overseas by students last year, with the federal government also processing a record number of applications since the middle of 2022.
Therefore, 2023 will be a record year of immigration into Australia, driven by international students.
In turn, rental markets will tighten even further, sending rents higher and placing tenants into even more serious financial stress.
It is a housing and inequality calamity in the making brought about by idiotic government policy that prioritises quantity of immigration over quality.
