CoreLogic’s latest rental snapshot shows that rents across the combined capital cities soared by 11.1% in the year to February 2023.
This occurred off a halving in the vacancy rate to 0.9%, from 1.8% a year earlier:
Earlier this month, Westpac’s economics team attributed the rental market tightening to record high net overseas migration (NOM), which they estimated was 400,000 in calendar year 2022.
“The stronger–than–expected surge in migration helps explain the significant tightening in rental markets and sharp escalation in rents”, Westpac noted.
On Thursday, the Australian Bureau of Statistics (ABS) released population data for the September quarter of 2022, which showed that quarterly NOM hit a record high 106,200, which followed the March quarter’s previous record high (100,900):
Annual NOM was the second highest on record at 303,700, just behind the March 2009 peak of 310,900:
When one adjusts September’s population figure of 26,124,800 by the 0.5% quarterly population growth recorded in the Q4 national accounts, Australia’s population grew by a record high 482,124 in the 2022 calendar year – 30,000 higher than the March 2009 peak:
Based on this level of population growth, Westpac’s 400,000 estimated NOM figure for 2022 looks about right.
Immigration and population growth is certain to rise further in 2023 given monthly visa data for February shows that net temporary arrivals are soaring on the back of record international student flows:
Not only has the Albanese Government lifted the permanent non-humanitarian migrant intake by 35,000 to a record high 195,000, but it has also expanded working hours and post-study work rights for international students, which is behind the record growth in student visa arrivals.
These four charts alone explain why Australia’s rental market has tightened so suddenly and rents are growing at such an extreme pace.
The Albanese Government has opened the immigration floodgates, meaning rental demand is running far ahead of supply. And it will continue to do so under the government’s ‘open borders’ policies.
It is an inequality disaster in the making that will place thousands of vulnerable Australians into deep financial stress and throw many others onto the streets.
