Two reports are out today showing that Australia’s unprecedented immigration program, which drove the nation’s population up by a record high 482,000 in calendar year 2022, is driving up both house prices and rents.
Domain’s March quarter house price report showed that prices across the combined capitals increased by 0.4% over the March quarter, whereas they rose by 0.7% across the combined regions. It was also the first rise in prices in a year:
House prices in Sydney, Adelaide and Perth increased over the March quarter, while they stabilised in Melbourne and Brisbane.
Weaker conditions are evident in the smaller capital cities as house prices fell over the March quarter in Canberra, Darwin and Hobart.
Domain attributed the national increase in house prices to the record immigration-fuelled population growth.
“As prices lift in certain areas, it’s a timely reminder that interest rates are not the only factor influencing housing activity and prices”, said Dr Nicola Powell, Domain’s Chief of Research and Economics.
“Population growth is rebounding faster than anticipated, with record levels of overseas migration playing a driving role in our housing markets”.
“Extremely tight rental markets are also making purchasing more attractive and may shift some to buy, given the current challenges of securing a lease”, Nicola said.
Meanwhile, PropTrack reported a deepening of Australia’s rental crisis with weekly rents hitting a record high while vacancy rates and days on site reach new lows.
“Rental market pressures are intensifying in the capital cities due to strong demand and a lack of stock available to lease”, PropTrack notes.
“In the combined capital cities, total rental listings were sitting at historic lows in March 2023 after falling 18.3% year-on-year”.
“With stock restricted in the capitals, demand is surging and competition intensifying. The number of enquiries per listing on realestate.com.au was up 8.3% year-on-year”.
“Strong demand is seeing properties lease quickly, affording landlords the opportunity to increase rents. Capital city rents were up 13% year-on-year to sit at $520 per week”.
“The rapid rebound in migration to Australia is increasing competition for rental properties”, PropTrack says.
“The March 2022 quarter saw the highest net overseas migration to Australia on record, with that figure then eclipsed over the September 2022 quarter”.
“More up-to-date overseas arrivals and departures data showed that permanent and long-term overseas arrivals in February 2023 were at record levels. Temporary student visas for higher education arrivals were the highest they’ve been since February 2019”.
“Most of the people arriving in Australia don’t own a property in the country and will be seeking somewhere to rent, intensifying competition and rental supply shortages”.
“These rental pressures are being felt acutely in Sydney, Melbourne and Perth”.
“There is a significant need for additional rental properties, particularly in the largest capital cities where most migrants arrive and live”, PropTrack argues.
Labor’s extreme immigration policy is proving to be disastrous for Australian housing affordability.
