John McGrath – Biggest migration surge in history impacting the market
We are definitely seeing the impact of increased migration and a return of foreign investors in the property market this Spring season.
Migrants and students are coming into a very tight rental market, and very low vacancy rates across the country are prompting some newly arrived families to buy a home immediately, which is unusual.
As discussed in this year’s McGrath Report, Australia is in the midst of its biggest-ever migration surge, with the Federal Government forecasting 1.5 million net overseas arrivals by 2027.
This equates to almost double the net number of migrants reaching our shores between 2017 and 2022 and is in stark contrast to the period over 2020 and 2021, when the Australian Bureau of Statistics (ABS) recorded more departures than arrivals in the wake of the COVID-19 border closures.
The influx is welcome news for the business community, which has been navigating staff shortages since the end of the lockdowns.
In a 2023 survey conducted on behalf of the Business Council of Australia, 60% of the 2,115 participants reported being impacted by worker shortages, with 15% saying they had been strongly impacted.
In the same survey, 66% of respondents agreed that properly planned and managed migration, including the provision of adequate services, housing and other infrastructure, is a good thing for Australia.
According to ABS 2021 census data, 79% of migrants choose to live in NSW, the ACT, Victoria and Queensland, with 19.2% residing in South Australia and Western Australia.
But a combination of increased living costs and incentives provided by the Department of Home Affairs is encouraging more migrants to settle outside of the eastern states’ capital cities.
The Regional Australia Institute (RAI) has set a goal to double the proportion of new migrants settling in regional Australia by 2032, and has created a framework to harness overseas talent through attraction and settlement support for both international migrants and the skilled expat community.
It is good to see more migrants taking the non-traditional pathway of regional living. As fantastic as Sydney and Melbourne are, Australia has so much more to offer new arrivals than big city living.
Our regions provide incredible lifestyle choices – beach, bush, snowfields, wine country; there are more job opportunities than ever before, and vast infrastructure upgrades have completely changed many areas. Some amazing projects are underway today, as documented in our McGrath Report, to enhance local recreational amenities and increase connection with the major cities.
The Property Council of Australia noted the 2023-2024 Federal Budget highlighted the strength of new overseas migration but also the extent of the housing supply crisis. It warned the Australian Government must match its targeted approach to migration with the same focus on housing investment and better planning processes across the country.
To that end, Minister for Home Affairs Clare O’Neil has outlined a new migration strategy that will align investments in infrastructure, service provision and housing, including ensuring joint action across all levels of government to address barriers to increasing housing supply.
There’s no question that higher migration will put pressure on housing prices, but we need more people in our country right now to fill critical shortages in the workforce – including in housing construction – and provide funding for our educational institutions.
It’s also important to remember that migrants add cultural depth and incredible diversity to our towns and cities, making life richer for all Australians.