As overseas property seekers’ interests in Australia’s property market rises and housing affordability stretches even further, discussions around migration and its impacts on the property market are heating up, according to CoreLogic head of research, Eliza Owen.
“But there are many other factors driving values and the rental market, and long-term, strategic migration policy should not be influenced by short-term volatility in migration and property markets,” she said.
CoreLogic’s report, Five things to know about migration and the housing market, unveils key insights into how migration is affecting the property market. Overseas migration immediately impacts rental market
According to the report, changes in overseas migration most immediately effects the rental market and not purchases. Owen pointed to the ABS data on permanent migrant settlement outcomes, which showed that 60.8% of migrant arrivals in the five years to 2021 were renters.
“The incidence of home ownership was higher among permanent migrants who had been in the country for longer,” she said.
“As of 2021, this included 55.6% of arrivals between 2012 and 2016, and 70.6% of migrant arrivals before 2012.”
Although a migration cap may have relieved housing demand in the short term, it has proven to lead to a demand shock, which quickly pushed up rents and inflamed an already tightening market.
Although imposing long-term targets on temporary and permanent migrants could allow better planning for infrastructure, housing and services, there would be trade-offs, Owen said. “A temporary cap on migration is not a good solution to easing demand side pressures, because it introduces more volatility to the market,” she said. “A consistent, longer-term target for migration could enable better planning of housing supply, but will have trade-offs for economic growth.
